TD Research discusses the latest readings from its high-frequency fair-vale model.
"If we look across the G10, the cheapest currencies are AUD, NZD, NOK, and SEK. GBP trades 2.8% to HFFV, underscoring how touchy markets on positive Brexit headlines. Barring GBP, these numbers suggest the USD screens about 1.4% rich to the rest, and yet EUR and CAD are trading mostly where they should.
That means a weaker USD, especially if a get a modest push higher in CNH, would benefit the cheap Asian currencies. Short EUR versus NOK/SEK looks more attractive than long EURUSD given's MRSI short EUR on growth, carry, HFFV, and the yield curve," TD notes.
"CAD's also fallen out of the long basket underscoring some room to fade it ahead of the Canadian elections. NZDCAD screens 2% cheap ahead of the lows," TD adds.