Tuesday, July 3, 2007

Buy Euro Call Options as Rates to Rise, Yield Premium Shrinks, Quaesta Say

(Bloomberg) -- Investors should buy call options to
bet that the euro will rise against the dollar as the interest-
rate spread between the 13-nation region and the U.S. narrows,
according to Quaesta Capital AG.

The European Central Bank will probably raise its benchmark
lending rate to 4.5 percent by the start of 2008 from 4 percent,
according to the median forecast of 31 economists in a Bloomberg
News survey published yesterday. The Federal Reserve will likely
keep its benchmark rate of 5.25 percent until the end of the
first quarter of next year, a separate survey shows.


Read more at Bloomberg Currencies News

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