Pinoy New Era Of Investment

Investment case:

• We believe that USD will appreciate over the coming three months thanks to the relatively better prospects for the US economy.
  

• The yield spread will narrow in favor of USD over the coming quarters.

• The trend has changed, and USD is now in a technical uptrend.

• The debt situation of Southern Europe will not be solved overnight.

• The time horizon is three months.

Potential/strategy:

We recommend investors to sell EUR/USD spot trading. The target is initially 1.3200 or may you can exit at your own risk or return and we recommend stop loss to be placed at around 1.3850. The spot reference is 1.3623.

Risk:

• For the short term there is a risk that USD may weaken, as the appreciation has been

relatively strong, and the market is stretched.

• The debt problem has added a risk premium to EUR. If the subject of debt recedes, the

risk premium will be lowered, and EUR will appreciate.