EURUSD – Toward 1.40
In an environment of low volatility, the underlying driver for the EURUSD is still the relative flows. Until April, expect EURUSD to drift higher, next to 1.385, then above 1.40 on relative equities and current account gap.
GBP – Risky Business
The GBP tends to be a “drama-queen”, moves tend to be fast and downward corrections tend to brutal. With GBPUSD and EURGBP correlation strengthening, weakness in stock markets is now associated with broadly weaker GBP.
USDJPY – Fine-tuned on BoJ
This week’s USDJPY reaction to the BoJ meeting showed how eager investors are to continue to play the long USD theme, also known as the “Fed easing less, while ECB and BoJ easing more”.
AUD & CAD – Slightly improving mood
Recent events have moved market towards less anticipated dovishness from both the Australian and Canadian central banks. Both the AUD and CAD have gained a bit of fresh air on the heels of these events.
Sweden – Weaker on Riksbank cut speculation
Our preliminary assessment is that the Riksbank will stay on hold, despite the weak CPI development. But reopened speculation of more easing from the Riksbank will likely weigh on the SEK ahead of the April meeting.
Norway – Investments leaving Norway
The NOK will stay weak over the coming months, as we will see a rush of maturities in foreign-owned bonds—up to NOK 50bn could leave
Read the full report: FX Strategy
Nordea