mardi 13 août 2013

BNP PARIBAS: Strategies For Playing The USD Strength

If the USD continues to appreciates over the coming days, there will be better opportunities for long USD/JPY, USD/CHF and short GBP/USD exposure rather than shorting EUR/USD, advises BNP Paribas.

"We think UK front-end rates could move lower if BOE officials continue to emphasize the dovish elements of their policy stance, while our BNP Paribas STEE model suggests GBPUSD is too high even if the current level of front-end rates were to be sustained . We entered a short GBP/USD quantitative trade, targeting a move back to 1.5250. Today’s data is consistent with the decline in GBP/USD," BNPP outlines its latest cable trade.

Along with these USD plays, BNPP also thinks that EUR/CHF looks attractive at current levels.

"EUR/CHF is currently particularly attractive given that eurozone stress has diminished to a new 12-month low. This trend is displayed in the Italian-German 10-year sovereign bond spread falling to its lowest level in 12 months at 243 bps this morning. Our own BNP Paribas weighted-average sovereign spread monitor indicates EURCHF should be trading close to 1.28," BNPP adds.

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