By eFXdata — May 11 - 09:30 AM
Societe Generale likes to sell USD bounces on the back of equity corrections.
"Over the last year and a bit, the correlation between the Nasdaq and the dollar has been very strong, though over the last decade, it hasn’t been at all. And that leaves us wondering whether the relationship will start weakening again now or reassert itself. In the very near term, the answer may be that it depends how violent the US equity correction proves to be – the more violent, the greater the likelihood that it gives the dollar a significant short-term lift," SocGen notes.
"A short, perhaps even sharp, equity correction that delivers a short, perhaps also a sharp dollar bounce would be an opportunity to sell dollars," SocGen adds.
Société Générale Research/Market Commentary