Societe Generale Research likes short USD/CAD to express USD weakness over the coming weeks.
“Our preferred way to express dollar weakness is
probably through USD/CAD, because that’s where long USD positioning is
most evident. If this week’s labour report could persuade the
RBA’s Philip Lowe to be a little less dovish, long AUD would be less
frustrating, too, helped by the outlook for the Chinese economy in the
coming months,” SocGen notes.
“EUR should rise but speculators are already low, and this will be much more a case of two steps up, one step back.
NOK is a volatility-hating currency which ‘ought’ to thrive now, and
SEK, GBP, CHF are all less vulnerable to positioning. JPY, however, is
subject to different pressures, with the BOJ by far the biggest driver
from here,” SocGen adds.
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