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Downside risk for Sterling and Euro - RBS

FXStreet (Bali) - Greg Gibbs, FX Trading Strategist at RBS, still favours overall USD strength, adding that downside risks remain for GBP and EUR.

Key Quotes

"We continue to see downside risk for GBP and EUR, as Europe is the main source of recent market fears over weaker global growth and disinflation pressure. GBP is trading below its pre-Scottish referendum low and looks particularly vulnerable."

"USD/JPY is proving resilient in the face of fresh highs in risk aversion since early in the year, and Japanese government and private sector concerns over the recent rapid fall in the JPY. We would continue to look for an opportunity to buy closer to 107"

"The recovery seen in some EM and commodity currencies against the USD is unlikely to last. Conditions are mixed with higher risk aversion weighing on these currencies, but a correction in recent USD strength supporting them. We would prefer to look for a rally in AUD towards .8850 sell."

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