Scope for commodity currency rebound vs EUR
Commodity currencies weakened after the US jobs data, but with some notable divergences as CAD outperformed AUD and NZD. For the bloc, a heavy calendar of economic data from China is likely to be important this week. In addition to June trade and inflation data, lending metrics will be watched closely and our economists’ forecasts for money growth and new loans are below consensus. The backdrop may thus remain challenging for commodity currencies this week, even as they remain broadly undervalued according to STEER. Our bias is to look for some correction in those currencies against the EUR, rather than USD. We remain short EURNOK via spot (target 7.71, stop 8.1170) and short EURAUD via options.
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BNP Paribas