Given the euro's dramatic rally over the past few days, investors are starting to go short the euro against emerging-market and commodity currencies that should benefit from the Fed's latest round of QE, says Charles St-Arnaud, at Nomura. "It would be very hard for the euro to stay in a sustainable way higher than $1.33," but at the same time, investors are reluctant to go long the dollar on the heels of the Fed's aggressive bond-buying program, he says. Instead, they are putting on bets that the Canadian and Australian dollars, and the Mexican peso, will gain, St-Arnaud says. On Fri, the euro was at $1.3142, up about 1.25% on the day, according to EBS via CQG.
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