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2 Apr 2015
USD longs to build up further in Q2 – BNPP
FXStreet (Barcelona) - Steven Saywell, Global Head of FX Strategy at BNP Paribas, expects USD strength to make a comeback in Q2, and shares the outlook for USD Index, EUR/USD and USD/CHF for the mentioned time-period.
Key Quotes
“Expectations of a Fed rate hike in September will maintain upward pressure on the USD in Q2, as US yield support rises. The prospect of Fed tightening contrasts with policy easing elsewhere.”
“Moreover, USD positioning is not extreme, indicating that there is potential for long positions to be built up further.”
“In Q2 and beyond, the USD is likely to gain most ground against currencies where monetary policy is loosest. The EUR, JPY and CHF will weaken broadly. The SEK and NOK are also set to reverse recent strength.”
“Q2 view: We expect the Fed’s trade-weighted USD index against the majors to gain 12% for the full year 2015, an additional 3% from current levels.
We forecast the Fed’s broad USD index to gain about 7% for the year, an additional 2% from current levels.”
“Q2 trades: Short EURUSD target 1.04.
Long USDCHF target 1.02.”
Key Quotes
“Expectations of a Fed rate hike in September will maintain upward pressure on the USD in Q2, as US yield support rises. The prospect of Fed tightening contrasts with policy easing elsewhere.”
“Moreover, USD positioning is not extreme, indicating that there is potential for long positions to be built up further.”
“In Q2 and beyond, the USD is likely to gain most ground against currencies where monetary policy is loosest. The EUR, JPY and CHF will weaken broadly. The SEK and NOK are also set to reverse recent strength.”
“Q2 view: We expect the Fed’s trade-weighted USD index against the majors to gain 12% for the full year 2015, an additional 3% from current levels.
We forecast the Fed’s broad USD index to gain about 7% for the year, an additional 2% from current levels.”
“Q2 trades: Short EURUSD target 1.04.
Long USDCHF target 1.02.”