30 July 2013
30 July 2013
Exchange Rate Perspectives: FX and the Financial Transaction Tax
G10 FX Valuation Monitor Lines in the Sand"
[Figure 1: The euro looks expensive and the dollar cheap
40
29.0
30 25.8
19S
20 15.0 12
10
0
-10
-20 .1 ° 10.5 7.0
-2.3
-8.5
-12.3
NZD AUD CHF CAD EUR NOK GBP SEK USD JPY
Said DS PYR•rwal
IFIgure 3: EUR/USD: The euro is expensive (I lough
remains within the 20% threshold ... Figure 27 The dollar is 9% cheap to fair value
130
120
110
100
90
80
70
60 d'r
Sam DS aRaikaarch 11:O11A1
73 78 78 82 86 88 91 94 97 00 03 08 09 130
120
110
100
90
80
70
Fig We LISFYJPV7 The yen is very cheap to fair value
1.8 EUR/USD — — —• 20% Band r 1.6 350
PPP EuRAJSD
1.4 1.4
1.2 1.2
1.0 1.0
0.8
0.6
73 77 81 85 89 93 97 01 05 09 13
San. 08 IltReenn
[Figure 5: USD/GBP: GBP is expensive ...
095
0 85
0 75
0 85
0 55
045
• 035 •
025 uSD/G8P
PPP uSD/G8P
73 77 81
Sane DB FX Ratsten 85 89 93 97 01 05 09 13 095
0.85
0 75
085
0 55
045
0 35
0 25 300
250
200
150
0.8 100
50 350
• 300
250
• 200
150
100
• 50
73 77 81 85 89 93 97 01 05 09 13
Sara' Le ',X Iteneich
'Figure 6: USD/CHF: as well as CHF
73 77 81 85 89 93 97 01 05 09 13
San*. DO +X Roserch
'Our measure of relative PPP is calculated using long-term averages from Jan-80 to Dec-04 and deflating by monthly CPI differentials. We refer to
current spot rates as 'cheap' or 'expensive' with explicit reference to this measure of fair valuation: these statements are not intended in any way to be
'buy' or 'ser recommendations.
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CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e)
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