FX Update: Still Bearish

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On August 4th 2008, relatively soon after BMI became bullish the US dollar and bearish oil, we took a look at currencies in the MENA region. We concluded that the indications were largely bearish, highlighting Egypt, Iraq, Kuwait and Israel as possible casualties. We now revisit these views, reiterating our bullish dollar, bearish everything else stance for now. Our end-09 forecast for US$/EUR is US$1.16/EUR, and we also look for a move in the dollar index to 93.50 (from its current level of around 88.41), as the global deleveraging process continues.