Bank of America Merrill Lynch Research discusses the latest signals from its G10 scorecard and notes that signals are becoming slightly less USD-supportive and increasingly 'relative-value' RV-oriented.
"We remain increasingly bearish NZDUSD & bullish USDCAD. These signals are supported by medium-term valuation and monetary expectations. Bullish USDCAD is further supported by flows, positioning and momentum - a potentially-powerful mix of signals rarely aligned together. Bearish NZDUSD is also supported by seasonals" BofAML notes.
"Bottom line, the scorecard still leans USD-positive, but we like RV expressions. In the risk / commodity-neutral space, short NZDNOK & NZDCAD. In the risk-off space, short NZDJPY & CADJPY," BofAML concludes.