Credit Agricole CIB Research discusses the USD outlook and maintains a bullish bias and a long USD/JPY exposure in spot targeting a move towards 115.
"The recent resignations of the two non-voting FOMC members Robert Kaplan and Eric Rosengren should not impact the Fed’s decision to start tapering potentially as soon as November. That said, given that both policymakers were leaning hawkish, their departures could influence the debate at the Fed over the pace and aggressiveness of policy normalisation in the medium term," CACIB notes.
"We therefore prefer to express any bullish USD view over the medium term via a long position in USD/JPY. In the near term, the growing prospect for Fed taper could boost US rates & UST yields and further weigh on risk sentiment," CACIB adds.