Citibank expects the USD to rally versus G10 in 2014 - pretty much across the board.
"GBP and NZD are the only currencies we expect to hold their own versus USD. Weakest currencies are likely to be JPY, AUD, CAD and CHF. The surprise in 2014 FX markets will likely be how well risk appetite survives tapering given the low volatility across asset markets," Citi projects.
"Carry is attractive under these conditions. The winning currencies will be the highest carry with the lowest country specific risk, the losers, currencies with low yields and flat yield curves," Citi adds.
In line with this view, Citi picks the following 5 FX trades for 2014:
1. Relative value in majors – Long GBP, USD vs. Short JPY, CHF
60% Buy USDJPY with 102.90 stop
40% Buy GBPCHF with 1.4640 stop
2. Further strength in USDJPY
Buy 6mth USDJPY 1x2x1 fly (strikes 106/109/112, expiry Jul 10) at 0.50% of USD
3. AUDNZD to take out parity
buy 9mth AUDNZD 1.00 European digital (spot ref 1.0760, expiry 10/10/14) at 12% of AUD Policy divergence is likely to drive AUDNZD into a new historic low range close to parity.
4. CAD undermined by disinflation and competitiveness
Sell CADMXN at 12.0840, targeting 11.2610 with a stop/loss 12.551
5. Long NOK on valuation grounds
Buy EURNOK 7.70 one touch (spot ref. 8.43, expiry 19 Dec 2014) at 19.75% of EUR.
0 commentaires:
Enregistrer un commentaire