By eFXdata — May 26 - 10:00 AM
Societe Generale Research discusses likes buying AUD, NZD, and CAD strategically around current dips.
"With current equity/G6FX correlations close to historic highs, the question of what happens to equities is important, and that depends on what kind of economic slowdown the Fed engineers. If the US economy slows slowly as the Fed raises rates, equity markets will be fine, and the dollar may already have peaked. But if there’s a hard landing, the dollar is unlikely to stop rising even when the Fed has finished raising rates – because equity markets will still be falling, and volatility will be high," SocGen notes.
"AUD, CAD and NZD will have a bumpy ride but these are levels to buy dips, or carefully build strategic longs. But buying the euro (or sterling) is betting not only that the US engineers a soft landing, but that escalation of the conflict in Ukraine is unlikely," SocGen adds.
Société Générale Research/Market Commentary