FX Forecast Update - Danske Bank

FX Forecast UpdateSeptember: The euro downtrend has come to an endArne Lohmann RasmussenChief Analyst, Head of Rates, FX and Commodities StrategyKasper Kirkegaard Stefan Mellin Stanislava PravdovaSenior Analyst Senior Analyst AnalystMorten Helt Lars Christensen Christin Tuxen Vladimir MiklashevskySenior Analyst Chief analyst Senior analyst Analystwww.danskebank.com/researchBloomberg: DRFX Important disclosures and certifications are contained from page 33 of this report.www.danskeresearch.com

Main forecast changes• When we published FX Trends in August 2012, we argued that EUR/USD should see a strong move higher on theback of global policy easing (penciling in 1.27 in 3M) but also that it was too early to dismiss the underlying eurodowntrendthat had been running for more than a year. For this downtrend to reverse, we argued, global growthwould have to recover and the Fed would have to outperform the ECB in terms of monetary easing. The firstrequirement has not yet been fulfilled, but the second has been more than met with the latest Fed open-ended easing,which is dollar-negative to such an extent, that we can say with a high probability that the euro downtrend has nowended. Furthermore, the ECB rescue plan has removed a significant part of the tail-risk that was previously attachedto the euro.• We expect the Fed to be successful in changing market expectations and anticipate that investors will continue toadd dollar-funded carry positions on the currency market. This should trigger further dollar weakness and not leastagainst the strongest high yielders. It would be naive, however, not to expect bumps on the way. Surely there will comeperiods of rising euro concerns and it also remains premature to dismiss further ECB easing. A deposit rate cutwould clearly be euro-negative but when evaluating the risks to EUR/USD from relative monetary policy it should beclear that it will be near impossible for the ECB to match the open-ended commitment made by the Fed. All in all, wehave revised our three-, six- and 12-month EUR/USD forecast to 1.35 (1.27), 1.35 (1.22) and 1.30 (1.20) (oldforecasts in brackets), respectively.• In general, we have penciled in less scandi-strength on a 3M horizon, reflecting less safe-haven flows into thescandies and especially SEK could be exposed to monetary easing. In general, it points to a divergent monetary andeconomic outlook for Norway and Sweden over the next six months. Positive carry and outstanding fundamentalsrelative to the euro indicate that the trend is still for stronger scandies on a six- and 12-month horizon.• Fed open-ended easing is expected to benefit EM and commodity currencies over the next three months.• EUR/CHF is set to continue higher over the next couple of months (3M forecast: 1.24) as safe-flows have slowed.However, we doubt that the Swiss franc will turn into a funding currency and we expect a new move lower in the crosson a 12-month horizon. We do not expect the SNB to lift its 1.20 EUR/CHF minimum target.www.danskeresearch.com2

EUR/USD – Temporary rebound expected• Growth: The US economy has clearly outperformed inrecent quarters but is now slowing. Europe remainscaught in a near-zero growth environment.• Monetary policy: ECB and Fed action duringSeptember has clearly been euro positive and dollarnegative. Relative monetary policy should remain asupport factor for EUR/USD going into 2013.• Flows: The US runs a sizable current account deficit,which should amplify the currency-negative effects ofQE3.• Valuation: EUR/USD is trading around neutral levelsaccording to long-term models (PPP estimate is 1.28)but slightly above our short-term financial model.• Risks: There are three key risk factors to EUR/USD inQ4: (1) the US elections and fiscal cliff, which couldtrigger a market sell-off, (2) implementation risks ofthe ‘Draghi plan’ (will Spain apply for a EFSF/ESMprogram?) and (iii) ECB rate cuts – a deposit rate cutwould make relative monetary policy less of aEUR/USD support factor.Forecast: 1.35 (3M), 1.35 (6M) and 1.30 (12M)EUR/USD 1M 3M 6M 12MForecast (pct'ile) 1.33 (71%) 1.35 (75%) 1.35 (67%) 1.30 (41%)Fwd. / Consensus 1.31 / 1.23 1.31 / 1.22 1.31 / 1.22 1.32 / 1.2250% confidence int. 1.29 / 1.33 1.28 / 1.35 1.27 / 1.37 1.24 / 1.3975% confidence int. 1.27 / 1.35 1.25 / 1.38 1.22 / 1.40 1.16 / 1.45Source: Danske Markets• Conclusion: The ECB has reduced tail-risks inEurope and the Fed has secured a historical easingcommitment in the US. Relative monetary policy isnow clearly favouring EUR/USD upside.Kasper Kirkegaard, Senior Analyst, kaki@danskebank.com, +45 45 13 70 181.501.401.301.20EUR/USD1.10Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-1375% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstThe euro has already rallied strongly but we expectmore EUR/USD upside as investors continue toreduce euro tail-risk hedges and move further intodollar-funded carry strategies. There will be bumpson the way, though, and temporary sell-offs shouldbe expected.www.danskeresearch.com3

EUR/USD – important issues to watch• A clear trend reversal in relative monetary policy− For more than a year relative monetary policy hasbeen supporting a euro downtrend as the ECB wascatching up with the Fed. This trend was broken inSeptember.− Even though it is too early to dismiss further ECBeasing, it appears highly unlikely that the EC B willbe able to match the Fed’s open-endedcommitment to monetary easing. Hence, relativemonetary policy is expected to have broken theyear-long euro downtrend.• A significant re-positioning has occurred but thereshould be more potential− Investors are now marginally short the dollaraccording to the IMM data. The euro has beenlagging the positioning shift in other currencies,however, and investors remain short EUR/USD.We expect a further unwind of euro shorts inresponse to Fed easing to lift EUR/USD further.Trend reversal in relative monetary policy115.0112.5110.0107.5105.0102.5100.0Source: Reuters EcoWin, Danske MarketsSpeculative investors remain short EUR/USD6050403020100-10-20-30-40-50-60Index97.592.5Jul JanOct09% of open interestApr Jul Oct Jan10+/- 1 stdev from meanApr Jul Oct Jan11Apr Jul12Non-commercial EUR positions06 07 08 09 10 11 12Bp1251007550250-25-50-75-1006050403020100-10-20-30-40-50-60Source: Reuters EcoWin, Danske MarketsKasper Kirkegaard, Senior Analyst, kaki@danskebank.com, +45 4513 70 18www.danskeresearch.com4

EUR/GBP – Bank of England and risk appetite to hurt sterling• Growth: The UK is in recession and GDP shrank by0.7% in Q2 – the third consecutive quarter withnegative growth and the largest fall since 2009.However, retail sales surprised positively in July,although exports are still at risk due to weak eurozonegrowth.• Monetary policy: We now think the Bank of England (BoE)will leave the base rate unchanged in November but stilllift the asset purchase programme by another GBP50bnto GBP425bn. Risk clearly tilted towards moreaggressive monetary policy like we have seen in the US.• Debt risks: Focus is on the downgrades in the eurozonebut could shift to negative focus on the UK, which runsa bigger deficit than most eurozone members, includingItaly, Spain and France.• Valuation: From a long-term perspective, sterling isundervalued (PPP around 0.77). A regime shift hasprobably happened though and EUR/GBP, in our view,belongs above 0.80 over the next six months.• Risks: The close correlation with the US dollar has beenless pronounced lately. We think it will return and itshould weigh on sterling.Forecast: 0.85(3M), 0.85 (6M) and 0.82 (12M)EUR/GBP 1M 3M 6M 12MForecast (pct'ile) 0.83 (93%) 0.85 (94%) 0.85 (87%) 0.82 (54%)Fwd. / Consensus 0.81 / 0.79 0.81 / 0.79 0.81 / 0.78 0.81 / 0.7850% confidence int. 0.80 / 0.82 0.79 / 0.82 0.79 / 0.83 0.78 / 0.8575% confidence int. 0.79 / 0.82 0.78 / 0.84 0.77 / 0.85 0.74 / 0.87Source: Danske Markets• Conclusion: We expect the combination of a weakerdollar and still dismal UK economic performance toweigh on sterling in H2 12. We expect the BoE to easemonetary policy further. We believe EUR/GBPbottomed out at 0.78 and that EUR/GBP will movehigher over the next three months, catching up withthe move higher in EUR/USD.Arne Lohmann Rasmussen, Chief Analyst , arr@danskebank.dk, +445 4512 85320.900.850.800.75EUR/GBP0.70Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-1375% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstwww.danskeresearch.com5

EUR/GBP – important issues to watch• The BoE stops easing− The latest inflation report and the comments fromcentral bank governor Mervyn King were less dovish thanexpected and if the BoE continues down this road, it mightgive some short-term relief to GBP. However, it wouldalso mitigate effects to bring the UK out of the currentrecession.• Dollar link to fade further− The link between GBP and USD is still very strong. Hence,sterling is still in the hands of the dollar. In particular, thesix- and 12-month forecasts for EUR/GBP are veryreliant on our dollar view.• A true safe haven?− We have seen safe-haven and central bankdiversification flows, e.g. from the SNB. However, the UKis on negative outlook at two of the three large ratingagencies and the public deficit remains significant. TheBoE owns a growing share of the Gilts market and the UKrecession is deepening. Hence, the status as safe havenmight be questioned further, adding upside pressure onEUR/GBP. If risk appetite continues to improve infinancial markets, it should also weigh on GBP.Sterling still closely linked with dollar0.80 Correlation coefficientBritain lagging behind (GDP since pre-crisis)08 09 10 11 12Source: Reuters Ecowin, Danske BankArne Lohmann Rasmussen, Chief Analyst , arr@danskebank.dk, +445 4512 85320.750.700.650.600.550.501021011009998979695949392GBP/USD correlation usingEUR as numeraire (3M rolling)2008 = 100Pound / dollar correlation0.450.45Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep1112Source: Reuters EcoWin, Danske BankUSAFrance10Y averageGermanyCorrelation coefficientUK0.800.750.700.650.600.550.501021011009998979695949392www.danskeresearch.com6

USD/JPY – Fed easing puts pressure on Bank of Japan• Growth: Q2 GDP growth was revised down from 0.3 to0.2% and the Japanese economy is clearly losingmomentum at the moment. Growth in H2 12 is likely toweaken further when the economy once again becomesmore dependent on external developments.• Monetary policy: The aggressive easing from Fed hasput further pressure on Bank of Japan (BoJ) to follow upwith substantial easing in order to prevent underlyingappreciation pressure on the yen. We think that BoJwill deliver and in our view is it only a matter of timebefore BoJ will expand its asset purchase programmeagain. We look for an increase of JPY5-10trn inSeptember, which should support USD/JPY.• Debt risks: Japan’s public debt is a major challenge.However, the government took an important step in theright direction in this case as a sales tax increase haspassed the Diet.• Valuation: PPP estimate around 83.• Risks: If BoJ fails do deliver enough monetary easing tocounter any aggressive Fed easing, it could causeUSD/JPY to move lower.Forecast: 81(3M), 82 (6M) and 83 (12M)90.085.080.075.0Morten Helt, Senior Analyst, mohel@danskebank.com, +45 45 12 85 18USD/JPY70.0Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-1375% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstUSD/JPY 1M 3M 6M 12MForecast (pct'ile) 80.0 (84%) 81.0 (84%) 82.0 (83%) 83.0 (78%)Fwd. / Consensus 78.4 / 79.0 78.4 / 79.0 78.4 / 80.2 78.4 / 83.650% confidence int. 77.3 / 79.3 76.5 / 80.0 75.7 / 80.7 74.0 / 82.175% confidence int. 76.5 / 80.3 75.2 / 81.5 73.7 / 83.0 70.7 / 85.7Source: Danske Markets• Conclusion: USD/JPY has gradually moved lower overthe past month as a new round of QE from the Fed hasbeen priced in. However, after a spike lower towards77.50 USD/JPY is once again back above 78 and weexpect to see USD/JPY at 80 in 1M. However, a neartermmove substantially higher lies mainly in thehands of the BoJ that has to deliver further easing forthis to materialise. Going forward, we have loweredour six- and 12-month forecasts as open-ended QEfrom the Fed has lowered the upside potential inUSD/JPY. We now see USD/JPY at 83 in 12 months.www.danskeresearch.com7

USD/JPY – important issues to watch• BoJ to move in a substantially more dovish direction− The aggressive move from the Fed has put further pressureon BoJ to follow up with substantial easing in order toprevent underlying appreciation pressure on the yen.− BoJ has become somewhat more aggressive in itscommunication about monetary easing this year, not leastafter it introduced an 1% inflation target in February.However, BoJ’s QE still lags behind other major centralbanks’ QE and BoJ should have plenty of room for furthereasing. We expect that BoJ will move in substantially moredovish direction and it is, in our view, only a matter of timebefore BoJ will ease its monetary policy further. In the nearterm we expect the asset purchase programme to beexpanded by JPY5-10trn in September or in October whenBoJ’s next revision of its growth and inflation forecast will bereleased.• Long positioning to support upside in USD/JPY− According to IMM, non-commercial investors have unwoundtheir short positions and are now net long JPY. Improvedrisk sentiment and low volatility are normally goodconditions for carry trades and a new build-up in shortpositions could support USD/JPY going forward.BoJ’s QE lags other major central banks’ QE35030025020015010050Jan. 08=100BoECentral bank's total assets350Fed300250SNB200ECB150BoJ1005008 09 10 11 12Source: Reuters EcoWin and Danske MarketsInvestors are now net long JPY0.5130of open interest>-0.67506 07 08 09 10 11 12Source: CFTC, Reuters EcoWin and Danske MarketsMorten Helt, Senior Analyst, mohel@danskebank.com, +45 45 12 85 18www.danskeresearch.com8

EUR/CHF – Upside has been re-opened by the ECB and Fed• Growth: The Swiss economy is under pressure fromthe strong Swiss franc and weaker foreign exportdemand.• Monetary policy: The SNB left monetary policyunchanged at its September meeting and pledged tocontinue defending the 1.20 minimum target.• Flows: Underlying flows remain CHF supportive, butunwinding of European tail-risk hedges has opened awindow for temporary EUR/CHF upside.• Valuation: The Swiss franc remains overvalued byabout 13% against the euro according to the DanskeBank General PPP model.• Risks: When the SNB judges deflation risks to behistory, a move back to a free-floating currency shouldbe expected. This is, in our view, not a big risk for thecoming quarters, however.Forecast: 1.24 (3M), 1.22(6M) and 1.20 (12M)1.301.251.20EUR/CHF1.15Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-1375% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstEUR/CHF 1M 3M 6M 12MForecast (pct'ile) 1.23 (90%) 1.24 (90%) 1.22 (52%) 1.20 (27%)Fwd. / Consensus 1.22 / 1.20 1.22 / 1.20 1.21 / 1.21 1.21 / 1.2450% confidence int. 1.21 / 1.22 1.21 / 1.23 1.20 / 1.23 1.19 / 1.2575% confidence int. 1.20 / 1.23 1.19 / 1.24 1.19 / 1.25 1.16 / 1.27Source: Danske Markets• Conclusion: The 1.20 minimum target is likely toremain in place going into 2013. This should secureEUR/CHF above 1.20. We doubt that the Swissfranc will re-emerge as a global funding currency,but see potential for a reduction in European tailriskhedges (i.e. long CHF positions) to temporarilylift EUR/CHF over the coming months.Kasper Kirkegaard, Senior Analyst, kaki@danskebank.com, +45 4513 70 18www.danskeresearch.com9

EUR/CHF – important issues to watch• This is not a currency peg− SNB’s minimum target on EUR/CHF is technically nodifferent from the interventions it conducted fromMarch 2009 to mid-2010, although this time the SNBhas announced the level that it will defend. It isimportant to note that this is not a currency peg in thetraditional sense. The SNB has not expressed any viewon how long it intends to keep the exchange rate floor inplace, or as to whether it intends to move the target.• Will the Swiss franc re-emerge as a funding currency?− The move higher in EUR/CHF after the strongresponse by the ECB and Fed has seen someanalysts argue that the Swiss franc has re-emergedas a global funding currency, and that this should liftEUR/CHF further.− A funding currency should offer a low and stableinterest rate, attractive valuation and be backed bylow inflation. The Swiss franc offers that.− However, given the losses faced by investors whowere funded in francs going into the 2008 crisis, wedoubt that the Swiss franc will re-emerge so soon asa global funding currency. The policy risks, andassociated tail-risks, also remain too high for that.Accelerated build-up in FX reserves425CHF bn375Source: Bloomberg, Danske MarketsSwiss franc still overvalued at 1.201.190 92 94 96 98 00 02 04 06 08 10 12Source: Reuters EcoWin, Danske MarketsKasper Kirkegaard, Senior Analyst, kaki@danskebank.com, +45 4513 70 1832527522517580400-402.01.91.81.71.61.51.41.31.2SNB FX reservesMonthly change11 12PPP estimateSNB's 1.20 minimum targetEUR/CHF spotCHF bn42537532527522517580400-40www.danskeresearch.com2.01.91.81.71.61.51.41.31.21.110

EUR/SEK – Riksbank gives in to external pressures• Growth: Swedish macro data has surprised on thedownside. Q2 GDP was revised lower. We see agradual slowdown in growth in the coming quarters.Sweden should, however, outgrow the eurozone.• Monetary policy: The surprise cut in September islikely to be followed by another 25bp in December asdata weakens. Current pricing is in excess of whatwe think is likely to be delivered though. Relativeyields remain in favour of the krona over time, butthe carry argument is less appealing than it was.• Fundamentals: Sweden’s stable triple-A, huge CAsurplus and low public debt are firmly in place.• Flows: Structural flows stemming from CBs andSWFs are likely to remain SEK supportive. However,recent intensified SEK demand should abate with theeurozone crisis, albeit not reverse.• Valuation: Fundamental equilibrium estimates likeFEER and PPP suggest the SEK is cheap at currentlevels, both versus the EUR and the USD.• Risks: Upside risks stem from negative domesticmacro and RB surprises. Downside risks fromrenewed EZ turmoil and associated EUR sell-off.Forecast: 8.50 (3M), 8.40 (6M) and 8.40 (12M)EUR/SEK 1M 3M 6M 12MForecast (pct'ile) 8.60 (41%) 8.50 (28%) 8.50 (33%) 8.40 (29%)Fwd. / Consensus 8.64 / 8.37 8.66 / 8.39 8.69 / 8.40 8.74 / 8.5250% confidence int. 8.53 / 8.74 8.47 / 8.83 8.41 / 8.92 8.32 / 9.0675% confidence int. 8.44 / 8.83 8.33 / 8.98 8.20 / 9.15 8.00 / 9.39Source: Danske MarketsStefan Mellin, Senior Analyst , mell@danskebank.com +46 (0)8 568 805 929.50EUR/SEK9.259.008.758.508.258.007.75Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-1375% conf. int. 50% conf.int. Forward Danske fcst Consensus fcst• Conclusion: The recent EUR/SEK rally was triggeredby a series of negative macro surprises, anunexpected RB rate cut and broad-based covering ofEUR shorts. Further gains cannot be ruled out andthe probability of substantial outperformance of thekrona in the near term has been significantlyreduced: as a consequence we have raised our 3Mforecast. However, solid fundamentals, the relativecyclical outlook and medium-term valuation suggestthe pair will slide lower over time.www.danskeresearch.com11

EUR/SEK – important issues to watch• More dovish stance from Riksbank: The hawks finally gavein earlier than we expected and with somewhat puzzlingarguments since the RB raised its macro forecasts. Thekrona appears to have been more important for the suddenchange than we had anticipated. We were left with theimpression that the RB has joined the currency war whichhas basically been led, and in the end is likely to be won, bymajor central banks, first and foremost the Fed. We thinkthe RB will skip October and deliver a final 25bp inDecember, less than priced by money market.• Less support from excessive quality demand: Theintensification of the eurozone crisis in Q2 led CBs (notablySNB) and SWFs to flee into SEK, exaggerating the priceaction in thin summer markets. Such flows should abate inthe coming months, albeit not necessarily reverse. But fornow it helps to put an end to recent very strong SEKmomentum.• Fundamental value in the SEK: Yes, the krona is historicallystrong, and challenging for exporters. But the fundamentalbackdrop suggests that the krona is undervalued atcurrent levels. Valuation and fundamental arguments arelikely to attract structural SEK demand over time.SEK bashed by negative macro surprises1007550250-25-50-75-100JanApr Jul Oct Jan10Sweden surprise indexSource: Reuters EcoWin, Danske MarketsThe Riksbank forecasts strong(er) kronaSource: Reuters EcoWin, Danske MarketsApr Jul Oct Jan11Apr Jul121007550250-25-50-75-100Stefan Mellin, Senior Analyst , mell@danskebank.com +46 (0)8 568 805 92www.danskeresearch.com12

EUR/NOK – still on a downtrend• Growth: Norwegian numbers continued to be quitestrong over the summer. In June manufacturingproduction rose 0.8% m/m and the credit indicatorjumped to 7.1%. Mainland GDP rose 1.2%, well abovetrend, after 1.5% q/q in Q1. The oil investmentsoutlook has improved further, with the latest estimatefor 2013 revised higher to NOK204bn, addingapproximately 0.8pp to mainland GDP growth in 2013.• Monetary policy: Norges Bank kept the policy rateunchanged at 1.5% at the September policy meeting,saying rates would have to rise sometime betweenDecember 2012 and June 2013. We agree with thisview. Very low inflation points in the other direction.• Flows: Norges Bank adjusted its daily purchase offoreign currency slightly higher in September to theequivalent of NOK500bn a day. The market is‘somewhat’ speculatively long the NOK. Safe-havenflows into NOK seem to have abated.• Valuation: NOK has become expensive (PPP 7.79).• Risks: New rate cuts, risk aversion and a lower oilprice could put strong upward pressure on EUR/NOK.Safe-haven positions are being unwound.Forecast: 7.35 (3M), 7.30 (6M) and 7.20(12M)EUR/NOK 1M 3M 6M 12MForecast (pct'ile) 7.45 (40%) 7.35 (23%) 7.30 (23%) 7.25 (24%)Fwd. / Consensus 7.49 / 7.35 7.51 / 7.35 7.54 / 7.33 7.60 / 7.3450% confidence int. 7.40 / 7.56 7.36 / 7.64 7.32 / 7.72 7.25 / 7.8675% confidence int. 7.34 / 7.63 7.25 / 7.76 7.15 / 7.90 7.00 / 8.14Source: Danske Markets• Conclusion: We expect EUR/NOK to declinetowards 7.35 in three months supported by relativerates and the improved risk appetite in financialmarkets. We still see strong international focus onstrong Norwegian fundamentals. We expect NorgesBank eventually to raise rates despite the strongNOK underlining that Norwegian monetary policy isout of sync with the rest of the world.Arne Lohmann Rasmussen, Chief Analyst, arr@danskebank.com, +45 4512 85328.258.007.757.507.25EUR/NOK7.00Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-1375% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstwww.danskeresearch.com13

USD/CAD – the loonie supported by Fed’s QE• Growth: Canadian Q2 GDP growth was a tad strongerthan expected and employment growth surprised onthe upside in August.• Monetary policy: The Bank of Canada (BoC) has keptthe target rate at 1.00% for the past two years. Themarket still prices a small probability of a hike over 12months and the market could speculate that a ratehike from BoC could come sooner. However, we arefairly convinced the BoC will remain on hold for alonger period.• Debt risks: Compared with the US, Canadian publicfinances are healthy and CAD stands to be supportedby the country’s solid triple-A rating.• Valuation: CAD is expensive on PPP measures , albeitless so than, for example, AUD.• Commodities: We look for oil prices to stay strong,which should support the loonie.• Risks: According to the latest IMM data, investors arespeculative long CAD. Positioning looks increasinglystretched and further build-up in long CAD positionscould slow down from here.Forecast: 0.96 (3M), 0.96 (6M) and 0.99 (12M)1.101.051.000.95USD/CAD0.90Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-1375% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstUSD/CAD 1M 3M 6M 12MForecast (pct'ile) 0.97 (44%) 0.96 (34%) 0.96 (40%) 0.99 (63%)Fwd. / Consensus 0.97 / 1.01 0.97 / 1.00 0.98 / 0.99 0.98 / 0.9750% confidence int. 0.96 / 0.98 0.95 / 0.99 0.94 / 1.00 0.93 / 1.0175% confidence int. 0.95 / 0.99 0.94 / 1.01 0.93 / 1.03 0.90 / 1.06Source: Danske Markets• Conclusion: USD/CAD has fallen below parity lately,as QE from the Fed has been priced in and hasprovided support to CAD via lower interest ratespreads and higher oil prices. The recent move loweris starting to look somewhat overdone but a significantcorrection higher is not imminent in our view. Weexpect CAD to continue to strengthen on US easingand target USD/CAD at 0.96 in three to six months.Morten Helt, Senior Analyst, mohel@danskebank.com, +45 45 12 85 18www.danskeresearch.com17

AUD/USD – in for a ‘leveraged’ boost from QE3 in Q4• Growth: Data out of Australia have been rather mixed butoverall we see clear signs of deterioration in the economy.Australian GDP only grew 0.6% in Q2 compared to 1.4%in Q1 on weaker housing and rising imports andemployment unexpectedly dropped in August.• Monetary policy: The Reserve Bank of Australia (RBA)has kept the cash target rate at 3.50% at the past twomeetings and while weak economic data will keep RBA ineasing bias for now, we think that the current marketpricing of around 75bp cuts over the next 12 months isquite aggressive. Hence, we look for relative rates tosupport AUD/USD in the near term.• Flows: Over the summer, speculative positioning hasturned net long again with levels now close to ‘neutral’,albeit far from 2011 highs.• Valuation: AUD/USD remains overvalued by long-termmeasures.• Commodities: Terms of trade look set to remainfavourable, as metals should be in for a rebound.• Risks: AUD remains highly correlated with global risksentiment and tail risks are on the downside.Forecast: 1.08 (3M), 1.08 (6M) and 1.05 (12M)1.15AUD/USD1.101.051.000.950.900.85Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-1375% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstAUD/USD 1M 3M 6M 12MForecast (pct'ile) 1.07 (79%) 1.08 (79%) 1.08 (74%) 1.05 (58%)Fwd. / Consensus 1.05 / 1.02 1.04 / 1.01 1.03 / 1.02 1.02 / 1.0350% confidence int. 1.03 / 1.07 1.02 / 1.07 1.00 / 1.08 0.96 / 1.0975% confidence int. 1.02 / 1.08 0.99 / 1.09 0.95 / 1.11 0.89 / 1.13Source: Danske Markets• Conclusion: After a sharp drop in AUD/USD to justbelow 1.02 the Aussie has regained all its losses sinceour last FX Forecast Update (15 August) as QE3 fromthe Fed has been priced in and subsequently delivered.Going forward, we expect easing from the Fedcombined with reduced tail risks and high commodityprices to spur market sentiment and support theAussie. We target AUD/USD at 1.08 in three to sixmonths.Morten Helt, Senior Analyst, mohel@danskebank.com, +45 45 12 85 18www.danskeresearch.com18

NZD/USD – to benefit from QE3 but weak spots remain• Growth: Data have generally surprised on the upsidesince May but the August employment report wasnotably weaker than expected and GDP data are likelyto show a markedly slower growth rate in Q2 as wasthe case in Australia.• Monetary policy: The Reserve Bank of New Zealand(RNBZ) has kept rates at 2.50% since the earthquakerelatedcut early in 2011. Cuts for the next 12M havebeen priced out over the summer and if global macroeconomic data stabilise, interest rates could continueto rise and hence support a move higher in NZD/USD.• Flows: Speculative positioning has turned net long andis now above the long-term average.• Valuation: NZD is heavily overvalued in PPP terms butfavourable commodity terms of trade largely justifythis in our view.• Commodities: There is a risk that elevated grainprices could eat into profits on New Zealand’s keyexports such as dairy products and meat.• Risks: NZD is highly sensitive to global risk appetiteand thus exposed to a general risk sell-off.Morten Helt, Senior Analyst, mohel@danskebank.com, +45 45 12 85 18Forecast: 0.83 (3M), 0.83 (6M) and 0.82 (12M)0.950.900.850.800.75NZD/USD0.70Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-1375% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstNZD/USD 1M 3M 6M 12MForecast (pct'ile) 0.83 (53%) 0.83 (53%) 0.83 (54%) 0.82 (51%)Fwd. / Consensus 0.83 / 0.79 0.82 / 0.80 0.82 / 0.79 0.81 / 0.8050% confidence int. 0.81 / 0.84 0.80 / 0.85 0.79 / 0.86 0.76 / 0.8775% confidence int. 0.80 / 0.85 0.78 / 0.87 0.75 / 0.88 0.70 / 0.90Source: Danske Markets• Conclusion: NZD/USD has risen steadily over thesummer and outperformed its peers recently. The risehas tracked the 2Y swap spread and economicsurprises closely. New Zealand stands to benefit froman improvement in risk appetite and relative rates ifQE3 becomes a reality. However, we see less potentialin NZD than in AUD at the moment, as the former hasmore weak spots. We target NZD/USD at 0.83 inthree to six months corresponding with a move uptowards the 1.30 levels in AUD/NZD .www.danskeresearch.com19

EUR/PLN – carry on the zloty is still attractive• Growth: The escalation of the European crisis isbecoming visible in Polish growth and we are now lessoptimistic on Polish growth this year. We have reviseddown our GDP forecast to 2.4% y/y for 2012 and1.9% y/y for 2013. The relatively sharp slowdown indomestic demand is particularly worrying.• Monetary policy: A couple of months ago, the Polishcentral bank (NBP) hiked its key policy rate by 25bp to4.75% on the back of relatively robust growth andslightly elevated inflation. However, with growth nowslowing and inflation beginning to inch down, webelieve the NBP will reverse its course in the nearfuture and start cutting interest rates, especially dueto the somewhat bleaker growth outlook. Hence, weexpect the NBP to cut its key policy rate by 100bp intotal in the coming 12 months.• Valuation: The zloty is trading close to its fair valuelevel, so valuation is unlikely to pose any significanthindrance to its continued near-term appreciation.• Risks: The major risk to the zloty remains the eurocrisis. A major escalation of the crisis would be likelyto hit the zloty hard – as was the case in late 2011.Forecast: 3.90 (3M), 3.95 (6M) and 4.00(12M)4.80EUR/PLN4.604.404.204.003.803.60Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-13EUR/PLN 1M 3M 6M 12MForecast (pct'ile) 3.97 (7%) 3.90 (8%) 3.95 (20%) 4.00 (31%)Fwd. / Consensus 4.11 / 4.16 4.14 / 4.14 4.18 / 4.08 4.25 / 4.0350% confidence int. 4.04 / 4.16 4.01 / 4.22 3.98 / 4.28 3.94 / 4.3775% confidence int. 4.00 / 4.22 3.94 / 4.33 3.88 / 4.45 3.75 / 4.62Source: Danske MarketsConclusion: The zloty has rebounded strongly recentlyon the back of easing euro crisis tensions. Further,with interest rates still relatively high in Poland, carryon the zloty is attractive. We believe relatively highinterest rates will continue to support the zloty in thecoming 1-3 months. However, medium term (6-12months), the expected further slowdown in the Polisheconomy and more aggressive monetary easing arelikely to curb strengthening of the zloty and we couldsee renewed zloty weakness on a 6-12 month horizon.• .Chief Analyst Lars Christensen larch@danskebank.com, +45 4512 85 3075% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstwww.danskeresearch.com20

EUR/HUF – Hungarian politics still the biggest risk• Growth: Growth remains lacklustre in the Hungarianeconomy. We expect Hungarian GDP to contract by2% in 2012 and 1% in 2013. This is not verysupportive for the long-term outlook for the forint.• Monetary policy: At its latest Monetary Councilmeeting, the MNB cut its key policy rate by 25bp onthe back of a continued deepening of the recession inthe Hungarian economy and easing inflationarypressures. Looking ahead, there should be more roomfor monetary easing in Hungary but we expect theMNB to move cautiously and renewed uncertaintyabout a possible IMF deal is likely to dampen MNB’seagerness to pursue further monetary easing.• Valuation: The external position of the Hungarianeconomy is relatively positive despite high Hungariandebt levels. Therefore, if anything, the forint isfundamentally undervalued. However, with major(other) risks, the valuation is likely to have littleimportance for the forint in the near term.• Risks: A re-escalation of the euro crisis and continuedworries about the Hungarian political situation posethe biggest risks for the forint.Forecast: 2.75 (3M), 2.80 (6M) and 2.80 (12M)330EUR/HUF320310300290280270260250240Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-1375% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstEUR/HUF 1M 3M 6M 12MForecast (pct'ile) 278 (30%) 275 (31%) 280 (50%) 280 (53%)Fwd. / Consensus 282 / 284 282 / 281 283 / 280 283 / 27850% confidence int. 277 / 287 273 / 289 268 / 292 261 / 29475% confidence int. 273 / 292 266 / 297 258 / 303 244 / 310Source: Danske MarketsConclusion: In the near term, attractive carry on theforint and a benign global financial environment islikely to support it. However, on a 6-12 month horizon,we see increasing risk of forint weakness but do notexpect a major correction – rather we expect theEUR/HUF to remain fairly range-bound and attractivecarry counteracts macroeconomic and politicalweaknesses.Chief Analyst Lars Christensen larch@danskebank.com, +45 4512 85 30www.danskeresearch.com21

EUR/CZK – overly tight monetary conditions support CZK• Growth: The economy is in deep recession, asdomestic demand has collapsed. With exportslikely to suffer further from the economic slump ineuroland, GDP in the last two quarters is likely tobe even more dismal than in H1. The downsiderisks to our current GDP forecast are high; CzechGDP might shrink as much as 2% y/y this year.• Monetary policy: Czech monetary conditions aretoo tight and the CNB has to act more aggressivelyto loosen monetary conditions if it is to fight therecession. However, besides the further 25bp ratecut that we expect in September, we believe mostCNB board members will be reluctant to use othernon-standard monetary policy measures.• Debt risks: Debt risks are low and budget deficit at3.2% of GDP this year.• Valuation: On a long-term perspective, CZK isundervalued (fair value is around 22.2).• Risks: Aggressive monetary easing, sharpdeterioration of the eurozone crisis.Analyst Stanislava Pradova spra@danskebank.com, +45 4512 80 71Forecast: 24.2 (3M), 24.3 (6M) and 24.8 (12M)26.5EUR/CZK26.025.525.024.524.023.523.022.5Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-1375% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstEUR/CZK 1M 3M 6M 12MForecast (pct'ile) 24.2 (29%) 24.2 (40%) 24.3 (51%) 24.8 (68%)Fwd. / Consensus 24.5 / 25.3 24.5 / 25.1 24.5 / 25.0 24.5 / 24.650% confidence int. 24.2 / 24.7 23.9 / 24.9 23.6 / 25.0 23.3 / 25.275% confidence int. 23.9 / 25.0 23.5 / 25.4 23.1 / 25.7 22.5 / 26.2Source: Danske Markets• Conclusion: As long as the euro positiveenvironment persists and monetary conditionsremain too tight, we expect the CZK to continueperforming well. Hence, we expect the CZK to gainmoderately on a 3M to 6M horizon but weaken ona 12M horizon as the collapsing economy forcesthe central bank to take more aggressive action.www.danskeresearch.com22

EUR/RUB – risk-on sentiment to support RUB• Growth: Despite slowing economic growth, the Russianeconomy is performing well compared with its peers andmuch better than developed economies. H1 12 growthended up at 4.4% y/y and we maintain our 2012 forecastat 4.1%.• Monetary policy: On 13 September, Bank Rossiiunexpectedly increased its main policy rates by 25bp assince July inflation has begun to accelerate on raisedtariffs and weaker crops. The new refi rate is 8.25%, backat the November 2011 level. The overnight repo rate roseto 5.50% and the depo rate to 4.25%.• Flows: The trade balance holds a strong surplus on high oilprices. Yet, surplus shrank to USD11.1bn in July fromUSD14bn a month earlier as imports grew faster thanexports. Capital net flows remain negative, although lessthan in early 2012 before the presidential elections. For2012 we expect at least USD70bn to flow out versusUSD81bn in 2011.• Valuation: EUR/RUB is trading slightly below the averageYTD on expected Q3 weakening.• Risks: Strong risk-off sentiment amid escalation ofeurozone problems and the Fed’s monetary steps are themost probable factors that could tear down the rouble.Forecast: 39.90 (3M), 39.72 (6M) and 42.22 (12M)EUR/RUB 1M 3M 6M 12MForecast (pct'ile) 41 (76%) 40 (34%) 40 (31%) 42 (58%)Fwd. / Consensus 40 / 40 41 / 40 41 / 40 43 / 4050% confidence int. 40 / 41 39 / 42 39 / 43 39 / 4475% confidence int. 39 / 42 38 / 43 38 / 44 37 / 47Source: Danske Markets• Conclusion: Bank Rossii has been steadily moving froma strictly managed peg versus a dual-currency baskettowards a freely floating rouble, expanding the FXtrading band and restraining its currency interventions.Inflation targeting is the bank’s main priority, which isalso reflected in monetary policy. The rouble’s pathtowards free floating currency is increasing its volatilitybut it is helping the Russian economy to better deal withexternal shocks. EUR/RUB corridor is expected toremain within 38.50 – 42.00 over the next six monthsat an oil price above USD90/bl.Vladimir Miklashevsky, Economist, vlmi@danskebank.com, +358 10 546 75 22484644424038EUR/RUB36Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-1375% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstwww.danskeresearch.com23

EUR/RUB – important issues to watch• Better flexibility, higher volatility− The rouble’s volatility remains high, allowing theRussian currency to depreciate more than beforeon oil price falls and to strengthen more on oil pricerises. The band widening policy is likely to continue,allowing the corridor to expand by one rouble everysix months.− We expect Bank Rossii to diminish its currencyinterventions, thereby improving market liquidity inthe uncertain global environment.− Eurozone woes and the slowdown of the Chineseeconomy could affect energy demand, dampeningRussian exports and the RUB FX rate.• Eye on seasonality− If Brent crude stays above USD100/bl on averageduring 2012, we do not expect any significantdownside pressure on RUB through the currentaccount. We expect a weaker rouble at the end ofAugust/September, as demand for FX traditionallyrises with an increase in imports, but a strongercurrency in November and January.Vladimir Miklashevsky, Economist, vlmi@danskebank.com, +358 10 546 75 22www.danskeresearch.com24

USD/TRY – in a close band• Growth: Turkish economic growth is slowing down. Energyprices have remained high, domestic demand and fixedinvestment have shrunk.• Monetary policy: Turkey’s central bank (TCMB) may finallycut its policy rate as exporters are complaining about thestrong lira. Core inflation is heading south, thus we expectthe TCMB to deliver at least a 50bp rate cut on 18September as economic growth is slowing down.• Flows: The current account deficit decreased to USD3.9bnin July from USD4.2bn in June as exports continued togrow thanks to the flexible TRY. Hopes for a bettersituation in the eurozone may boost Turkish exports butmay put upside pressure on TRY as the risk-on sentimentreturns to the market.• Valuation: USD/TRY is trading neutral at the average YTD.But room for weaker TRY is there at least until 1.83 forUSD/TRY by the end of 2012.• Risks: In the autumn, new discussions and stepsconcerning the future of the eurozone may bring backsturdy risk-off sentiment, pushing TRY rates down asinvestors retreat from emerging currencies.Forecast: 1.82(3M), 1.79(6M) and 1.78(12M)2.10USD/TRY2.052.001.951.901.851.801.751.701.651.60Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-1375% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstUSD/TRY 1M 3M 6M 12MForecast (pct'ile) 1.80 (49%) 1.82 (61%) 1.79 (41%) 1.78 (35%)Fwd. / Consensus 1.81 / 1.82 1.82 / 1.81 1.84 / 1.82 1.89 / 1.7350% confidence int. 1.78 / 1.82 1.77 / 1.85 1.75 / 1.88 1.73 / 1.9475% confidence int. 1.76 / 1.85 1.74 / 1.89 1.70 / 1.95 1.62 / 2.06Source: Danske Markets• Conclusion: USD/TRY turned more volatile in August-September as risk sentiment continued to change onthe altering global mood. A rate cut by the TCMB wouldweaken TRY but brighter eurozone prospects wouldsupport the lira. We expect the high oil price and rapidlychanging risk sentiment to keep USD/TRY within a1.78– .83 band until the end of 2012.Vladimir Miklashevsky, Economist, vlmi@danskebank.com, +358 10 546 75 22www.danskeresearch.com25

USD/ZAR – labour unrest adds to downside risks to ZAR• Growth: Besides the negative impact of the globaleconomic slowdown, the South African economycontinues to be paralysed by labour unrest relatedshutdowns of operations at major mines. Weexpect the South African economy to grow around2.2% y/y in 2012E and 2.7% y/y in 2013E.• Monetary policy: We expect the SARB to stay onhold in September and probably in Novemberfollowing a 50bp rate cut in July. Sharp widening ofthe current account deficit and intensifying labourunrest limit the room for further monetary easing atthis time.• Debt risks: Debt risks are fairly low. The SouthAfrican government projects a budget deficit of4.6% in 2012/13 and plans to reduce the deficitto 3% of GDP in 2014/15.• Valuation: From a long-term perspective, the ZARis strongly overvalued (fair value around 10.0).• Risks: A spike in risk aversion or further labourunrest could trigger a strong rand sell-off. Cautionis warranted.Analyst Stanislava Pradova spra@danskebank.com, +45 4512 80 71Forecast: 8.35(3M), 8.45 (6M) and 8.75 (12M)10.00USD/ZAR9.509.008.508.007.507.006.50Sep-11 Dec-11 Apr-12 Jul-12 Oct-12 Jan-13 May-13 Aug-1375% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstUSD/ZAR 1M 3M 6M 12MForecast (pct'ile) 8.33 (58%) 8.35 (57%) 8.45 (60%) 8.75 (66%)Fwd. / Consensus 8.31 / 8.24 8.38 / 8.21 8.48 / 8.04 8.68 / 7.8250% confidence int. 8.05 / 8.49 7.91 / 8.66 7.78 / 8.81 7.60 / 9.0675% confidence int. 7.91 / 8.71 7.66 / 9.06 7.40 / 9.40 6.97 / 9.91Source: Danske Markets• Conclusion: Deteriorating external imbalances,intensifying labour unrest, a weakening economyand, last but not least, fundamental overvaluationof the rand all represent clear downside risks tothe rand. We expect the rand to weaken on allforecast horizons.www.danskeresearch.com26

USD/CNY – stable but get used to more volatility• Growth: Growth has continued to ease in Q3 butwe expect a moderate improvement in Q4 on theback of fiscal and monetary easing. The slow downis increasingly being driven by weaker exports andinventory cuts. The property market has started torecover since May.• Monetary policy: The leading interest rate was cutin June and July but the reserve requirement hasnot been cut since May. We still expect one moreinterest cut and the reserve requirement to be cutby 150bp, but there is increasing risk it will be lessbecause of concern about the rebound in theproperty market.• FX policy: The daily trading band has been widenedand increasing two-way volatility. China is movingtowards a convertible currency and floatingexchange rate.• Valuation: CNY is no longer markedly undervalued.• Risks: China could allow its currency to depreciatein a hard-landing scenario .Forecast: 6.30 (3M), 6.30 (6M) and 6.26 (12M)6.66.56.46.36.2AprUSD/CNY exchange rateDaily trading bandPBoC reference rateJun Aug Oct Dec11Feb Apr Jun Aug12Source: Danske Markets• Conclusion: While we expect to see more two-wayvolatility, China will maintain the status quo aheadof the US presidential election and not fuelspeculation that it will allow its currency toappreciate. We expect market conditions (aseasonally high trade balance surplus) to supporta slight appreciation in the short run. However,longer term, the CNY should no longer be regardedas a one-sided play.Senior Analyst Flemming J. Nielsen flwmm@danskebank.com, +45 4512 85 35Spotwww.danskeresearch.com6.66.56.46.36.227

Danske Markets FX forecastsForecast Forecast vs forward outright, %Spot +1m +3m +6m +12m +1m +3m +6m +12mExchange rates vs EURUSD 1.306 1.33 1.35 1.35 1.30 1.8 3.3 3.2 -0.9JPY 102.7 106 110 111 108 3.2 7.1 8.1 5.2GBP 0.804 0.83 0.85 0.85 0.82 3.2 5.6 5.5 1.4CHF 1.211 1.23 1.24 1.22 1.20 1.6 2.4 0.8 -0.7DKK 7.45 7.46 7.46 7.45 7.45 0.1 0.2 0.1 0.2NOK 7.46 7.45 7.35 7.30 7.25 -0.3 -2.0 -3.1 -4.6SEK 8.57 8.60 8.50 8.40 8.40 0.2 -1.2 -2.7 -3.4Exchange rates vs USDJPY 78.6 80 81 82 83 1.4 3.7 4.8 6.1GBP 1.62 1.60 1.59 1.59 1.59 -1.4 -2.2 -2.2 -2.3CHF 0.93 0.92 0.92 0.90 0.92 -0.2 -0.8 -2.3 0.2DKK 5.71 5.61 5.53 5.52 5.73 -1.7 -3.0 -2.9 1.1NOK 5.71 5.60 5.44 5.41 5.58 -2.1 -5.1 -6.0 -3.8SEK 6.56 6.47 6.30 6.22 6.46 -1.6 -4.4 -5.7 -2.5CAD 0.98 0.97 0.96 0.96 0.99 -0.6 -1.8 -2.1 0.4AUD 1.04 1.07 1.08 1.08 1.05 3.0 4.4 5.2 3.7NZD 0.83 0.83 0.83 0.83 0.82 0.7 1.1 1.7 1.7Note: GBP, AUD and NZD are denominated in local currency rather than USDwww.danskeresearch.com28

Danske Markets FX forecasts vs DKKForecast Forecast vs forward outright, %Spot +1m +3m +6m +12m +1m +3m +6m +12mExchange rates vs DKKEUR 7.45 7.46 7.46 7.45 7.45 0.1 0.2 0.1 0.2USD 5.71 5.61 5.53 5.52 5.73 -1.7 -3.0 -2.9 1.1JPY 7.26 7.04 6.78 6.71 6.90 -3.0 -6.5 -7.4 -4.8GBP 9.27 8.99 8.78 8.76 9.09 -3.0 -5.1 -5.0 -1.2CHF 6.15 6.07 6.02 6.11 6.21 -1.4 -2.2 -0.7 0.9NOK 1.00 1.00 1.01 1.02 1.03 0.4 2.1 3.2 4.9SEK 0.87 0.87 0.88 0.89 0.89 -0.1 1.4 2.9 3.6CAD 5.85 5.78 5.76 5.75 5.79 -1.0 -1.2 -0.9 0.6AUD 5.95 6.00 5.97 5.96 6.02 1.3 1.3 2.1 4.7NZD 4.71 4.66 4.59 4.58 4.70 -0.9 -1.9 -1.2 2.8PLN 1.81 1.91 1.89 1.86 6.4 6.0 6.5CZK 0.30 0.31 0.31 0.30 1.4 1.0 -0.9HUF 0.26 0.27 0.27 0.27 4.2 3.4 5.5RUB 0.18 0.19 0.19 0.18 2.2 4.2 1.3www.danskeresearch.com29

Danske Markets FX forecasts vs SEKForecast Forecast vs forward outright, %Spot +1m +3m +6m +12m +1m +3m +6m +12mExchange rates vs SEKEUR 8.57 8.60 8.50 8.40 8.40 0.2 -1.2 -2.7 -3.4USD 6.56 6.47 6.30 6.22 6.46 -1.6 -4.4 -5.7 -2.5JPY 8.35 8.11 7.73 7.57 7.78 -3.0 -7.8 -10.0 -8.1GBP 10.66 10.36 10.00 9.88 10.24 -2.9 -6.5 -7.7 -4.7CHF 7.08 6.99 6.85 6.89 7.00 -1.4 -3.6 -3.5 -2.7NOK 1.15 1.15 1.16 1.15 1.16 0.5 0.7 0.3 1.3DKK 1.15 1.15 1.14 1.13 1.13 0.1 -1.4 -2.8 -3.5CAD 6.73 6.67 6.56 6.48 6.53 -1.0 -2.6 -3.7 -2.9AUD 6.84 6.92 6.80 6.72 6.78 1.3 -0.1 -0.7 1.2NZD 5.42 5.37 5.23 5.16 5.30 -0.9 -3.3 -4.1 -0.8PLN 2.08 2.18 2.13 2.10 5.0 3.1 2.9CZK 0.35 0.35 0.35 0.34 0.0 -1.9 -4.4HUF 0.30 0.31 0.30 0.30 2.8 0.6 2.0RUB 0.21 0.21 0.21 0.20 0.8 1.3 -2.2www.danskeresearch.com30

Danske Markets FX forecasts vs NOKForecast Forecast vs forward outright, %Spot +1m +3m +6m +12m +1m +3m +6m +12mExchange rates vs NOKEUR 7.46 7.45 7.35 7.30 7.25 -0.3 -2.0 -3.1 -4.6USD 5.71 5.60 5.44 5.41 5.58 -2.1 -5.1 -6.0 -3.8JPY 7.27 7.03 6.68 6.58 6.71 -3.5GBP 9.28 8.98 8.65 8.59 8.84 -3.4 -7.2 -8.1 -5.9CHF 6.16 6.06 5.93 5.98 6.04 -1.9 -4.3 -3.8 -3.9SEK 0.87 0.87 0.86 0.87 0.86 -0.5 -0.7 -0.3 -1.3DKK 1.00 1.00 0.99 0.98 0.97 -0.4 -2.1 -3.1 -4.7CAD 5.86 5.77 5.67 5.63 5.63 -1.5 -3.3 -4.0 -4.1AUD 5.95 5.99 5.88 5.84 5.86 0.8 -0.8 -1.1 -0.1NZD 4.72 4.65 4.52 4.49 4.57 -1.4 -4.0 -4.4 -2.0PLN 1.81 1.88 1.85 1.81 4.2 2.8 1.6CZK 0.30 0.30 0.30 0.29 -0.7 -2.2 -5.6HUF 0.26 0.27 0.26 0.26 2.1 0.3 0.7RUB 0.18 0.18 0.18 0.17 0.1 1.0 -3.4www.danskeresearch.com31

EMEA FX ForecastEUR USD DKK SEK NOKDanske Forward Danske Forward Danske Forward Danske Forward Danske ForwardPLN 14-Sep 4.06 3.09 183.6 211.9 183.8+1M 3.97 4.08 2.98 3.10 187.9 216.6 211.3 187.7+3M 3.90 4.10 2.89 3.13 191.3 181.4 217.9 210.2 188.5 182.5+6M 3.95 4.14 2.93 3.15 188.6 179.6 215.2 208.9 184.8 181.6+12M 4.00 4.22 3.08 3.20 186.3 176.3 210.0 206.6 181.3 180.0HUF 14-Sep 281 214 2.65 3.06 2.66+1M 278 282.4 209 215.0 2.68 3.09 3.05 2.68+3M 275 284.8 204 216.9 2.71 2.62 3.09 3.03 2.67 2.63+6M 280 287.9 207 219.1 2.66 2.58 3.04 3.01 2.61 2.61+12M 280 293.4 215 222.9 2.66 2.53 3.00 2.97 2.59 2.59CZK 14-Sep 24.3 18.5 30.6 35.3 30.7+1M 24.2 24.4 18.2 18.5 30.8 35.5 35.4 30.8+3M 24.2 24.4 17.9 18.6 30.8 30.6 35.1 35.4 30.4 30.8+6M 24.3 24.4 18.0 18.5 30.7 30.5 35.0 35.5 30.0 30.9+12M 24.8 24.4 19.1 18.5 30.0 30.5 33.9 35.7 29.2 31.1RUB 14-Sep 40.03 30.49 18.62 21.48 18.64+1M 43.76 40.22 32.90 30.62 17.05 19.65 21.41 17.03+3M 39.91 40.61 29.56 30.92 18.69 18.34 21.30 21.25 18.42 18.45+6M 39.72 41.24 29.42 31.38 18.76 18.05 21.40 20.99 18.38 18.25+12M 42.22 42.55 32.48 32.32 17.64 17.47 19.89 20.47 17.17 17.83TRY 14-Sep 2.36 1.79 316 365 317+1M 2.40 2.37 1.80 1.80 311 358 364 310+3M 2.46 2.38 1.82 1.82 303 312 346 362 299 314+6M 2.42 2.42 1.79 1.84 308 308 351 358 302 312+12M 2.31 2.48 1.78 1.89 323 300 364 351 314 306ZAR 14-Sep 10.77 8.19 69.2 79.9 69.3+1M 11.08 10.79 8.33 8.22 67.3 77.6 79.8 67.2+3M 11.27 10.88 8.35 8.29 66.2 68.4 75.4 79.3 65.2 68.9+6M 11.41 11.02 8.45 8.38 65.3 67.5 74.5 78.6 64.0 68.3+12M 11.38 11.30 8.75 8.58 65.5 65.8 73.8 77.1 63.7 67.2Source: Danske Marketswww.danskeresearch.com32

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