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9 Feb 2015
Short-term upside for the USD post-NFP – BAML
FXStreet (Barcelona) - FX Strategists at BofA-Merrill Lynch, explain that USD may see a short-term upside post the NFP, and further suggest buying into USD/CHF, with the pair being the only G10 FX cross with a neutral USD position.
Key Quotes
“Following the very strong NFP data, investors may be forced to buy USD in the days ahead.”
“Indeed, our proprietary flows last week were dominated by hedge fund USD selling ahead of the NFP, reflecting concerns that a weak number could squeeze the long USD market position.”
“Hedge funds sold only JPY and SEK against the USD, while they bought primarily EUR and AUD.”
“Official sector EUR/USD buying seems to have also stopped and actually reversed last week.”
“Moreover, recent EM reserve accumulation does not seem to have supported the Euro, suggesting less diversification flows.”
“We particularly like buying USD/CHF, as the CFTC data suggests that this is the only G10 FX cross in which the market USD position is neutral”
Key Quotes
“Following the very strong NFP data, investors may be forced to buy USD in the days ahead.”
“Indeed, our proprietary flows last week were dominated by hedge fund USD selling ahead of the NFP, reflecting concerns that a weak number could squeeze the long USD market position.”
“Hedge funds sold only JPY and SEK against the USD, while they bought primarily EUR and AUD.”
“Official sector EUR/USD buying seems to have also stopped and actually reversed last week.”
“Moreover, recent EM reserve accumulation does not seem to have supported the Euro, suggesting less diversification flows.”
“We particularly like buying USD/CHF, as the CFTC data suggests that this is the only G10 FX cross in which the market USD position is neutral”