Citigroup Recommend Sell On Euro / Yen

Citigroup Inc., the largest currency trader in the world, said its forecast that the euro will weaken against the yen, rather than the dollar, as traders seek safe-haven assets amid turmoil in Greece and China. The yen has appreciated by 3.6% against the euro last month, beating other major currencies. The yen advanced to the 6-week highs against the euro on Monday after Greece rejected the referendum results and weaker policy tightening in the Chinese stock market recently fueled demand for safe haven assets.

According to Citigroup strategically, there is a currency that is better than taking a short position on the euro dollar. Yen will be in the forefront of the domestic position, he added. The euro is expected to weaken to the range of 130 yen in the next month or the next, he said. Hedge funds and other large speculators have cut bearish positions on the euro and the yen in the past month, according to data from the Commodity Futures Trading Commission. It is positive for traders who switched from the euro, which means there is only a small chance for short covering.