Forex Insider Daily Update 18 June 2017

Major Bank Daily Position

NZD/JPY - Morgan Stanley - LONG Position - From 78.49 - Closed at market at 79.89 (M/T) +140 pips

USD/CAD - Morgan Stanley - LONG Limit Order - Placed - Entry: 1.3160, Target: 1.4000, Stop: 1.3000 (M/T)

AUD/NZD - Nomura - LONG Limit Order - Placed - Entry: 1.0510, Target: 1.0750, Stop: 1.0400 (M/T)

AUD/NZD - Nomura - LONG Limit Order - Filled - Entry: 1.0510 - Target: 1.0750, Stop: 1.0400 (M/T)

Credit Agricole

In our view, investors continue to under-estimate the Fed’s resolve to normalize policy. We believe the outcome that the FOMC become less datadependant and focused on longer term policy normalization in order to avoid risk of hiking too fast.

We believe long USD/CAD remains an attractive way to position in this view, CACIB maintains a long USD/CAD position from 1.319 targetting a move back to 1.38.

ABN AMRO

We think that BOE will keep monetary policy unchanged this year and the next because of the real income squeeze and uncertainity related to Brexit.

3 members vote for a 25bp increase and mentioned the continuing growth of employment could spare capacity is being eroded, lessening the trade off that the MPC is required to balance and all, all else equal, reducing the MPC tolerance for above target inflation.

We expect GBP to relatively resilient versus US dollar and euro. Our target year end for GBP/USD are 1.3 and EUR/GBP 0.88.

BofAML

We expect Fed to hike faster than markets expect, ECB to taper QE slower than expected & expect BOJ to stick to its yield target until inflation is much higher than current levels. But at some point this year drop it’s guidance on annual purchase and we expect BOE to be on hold but with increasing risks of a rate hike if inflation pressures persists.

If our call for ECB and Fed are right, we should see EURUSD to year end at 1.08 and the end of ECB QE should then support the Euro in 2018 bringing EUR/USD to 1.15 in our projections.

BofAML prefers long EUR/GBP and has a long bias for EUR/JPY.

BofAML recommends expressing its long EUR bias through non USD cross.

Nomura

The absorption of the past oil price shick has opened the door to the BOC reversing its 2015 insurance rate cuts. We continue to look for the BOC to start its rate hike in H1 2018.

Nomura maintain its long CAD exposure via USD/CAD 1.34 – 1.31 put spread.

NAB

NAB notes that USD/JPY is still at the mercy of US yields and gold.

NAD targets USD/JPY at 114,116,118 by end of Q2,3,4 respectively of 2017.

Deutsche Bank

USD/JPY dips around current levels are attractive tactical buying opportunity mainly on the flows grounds which suggest that Jap investors remain reliable buyers of USD/JPY below 110.

Jap investors should cement a firm floor by buying dips around 110.

In line with this view, DC continues to recommend tactical buying USD/JPY dips targeting 118 by year end.