Foreign exchange overview Foreign exchange - Key points EN EaPenta ee nicer? underweight neutral overweight e EUR: Greek election results reduce the near-term euro break-up risk. Now starts a difficult period with re-negotiation of the Greek austerity program. Also Spanish yields, which have reached hard to sustain usp highs, need to be addressed. As the crisis carries on and hurts growth prospects for Europe well into 2013 EUR we recommend to keep euro short positions. The risk for either an ECB rate cut or an extension of bond wep purchase program by ECB as well as the increasing risks to the banking system are weighing on the euro. ¢ The extension of Operation Twist in response to weakening growth outlook in the US has its pros and aie cons for the USD. Global risk aversion and search for alternatives to the euro is supporting the greenback CHF currently. The clear commitment of the Fed to respond with more stimulus to European contagion and the approaching fiscal cliff is limiting the upside potential for the USD. SEK ¢ The CAD has increased in attractiveness recently due to weaker spot rates, while good growth dynamics NOK in Canada still lead to rate hike expectations. We continue to recommend an overweight. CAD ¢ We keep the overweight position in the GBP. The BoE eased monetary conditions for the banking system to protect the UK financial market against contagion effects spilling over from the continent. NZD Apart from this, we think the pound remains well supported, because valuation is cheap and investors are AUD seeking liquid alternatives to the euro. . . Bnew old ¢ EURCHF is currently trading at the low end of our expected range of 1.20-1.25, and we therefore keep an underweight position in the CHF. The 1.20 EURCHF floor prevents any CHF appreciation and the SNB sources UES Sieias efaee.20)2 has clearly shown in May that it is willing and can protect the floor; we expect the SNB to continue in this. ¢ Sweden and Norway stand out for their lower debt-to-