Calyon's Kotecha Says Euro May Fall to $1.30 in Coming Months

By Mark Barton and Andrew MacAskill

Oct. 15 (Bloomberg) -- Mitul Kotecha, global head of currency strategy at Calyon in Hong Kong, comments on the euro, dollar and yen.

Kotecha spoke in a Bloomberg Television interview today. Calyon is the investment-banking unit of France's Credit Agricole SA, France's third-largest bank by market value.

On the euro versus the dollar

``There is every chance the euro in the next few months will fall below $1.30 and we are certainly suggesting that we could end up possibly as low as $1.28 or even beyond that.

``Higher risk aversion, concerns about the European economy, and deleveraging are giving a positive impact for the U.S. dollar against the euro.''

On the Japanese yen

``Risk aversion is certainly not going to ease very quickly, which again supports currencies such as the Japanese yen.

``Dollar-yen is clearly looking to move below 100. I think 95 is still a very important psychological level and I can easily see it getting there within the next couple of months.''

On dollar strength

``We will see at least some semblance of risk appetite returning into 2009, albeit extremely gradually. I think that will turn the trend for the U.S. dollar. We may start to see the dollar resume a weaker trend as we go into 2009, into the second and third quarters, as risk appetite resumes.

On the outlook for global growth

``The economic consequences are still going to get much worse. Clearly, we are going to be in a severe recession. That implies that risk appetite is not really going to improve too dramatically.

``It's going to be a long and protracted recession. But I think going to a depression is way off the mark. We are not there yet.''

To contact the reporter on this story: Andrew MacAskill in London at amacaskill@bloomberg.net