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May 06 - 10:55 AM

EUR/USD: Stuck But Should Resume Upward Soon; USD/CAD Shorts Still Attractive - SocGen

By eFXdata  —  May 06 - 09:30 AM
Societe Generale discusses its latest bias on EUR/USD and USD/CAD.
"EUR/USD is stuck. The dollar’s sell-off between March and December 2020 was driven by the Fed’s dramatic policy response. The bounce in Q1 came from a dramatic upgrade to US growth expectations thanks to vaccines and fiscal policy, but strong growth and eventual policy tightening is priced in, and the next move is more likely to come either a big repricing of 2022 Fed policy, or a re-pricing of global growth prospects. EUR/USD should resume its upward march soon, and broad-based dollar softness pick up later. But nothing is likely to happen on either front today," SocGen notes. 
"Australian data and resource prices argue for a stronger AUD and for the RBA to act earlier than it plans to but with the diplomatic dispute in the foreground AUD/NZD is capped, and USD/CAD shorts are a better way of trading the commodity-rally, despite the risk of soft Canadian jobs data," SocGen adds. 
Société Générale Research/Market Commentary


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