Major currencies are little changed on net coming out of the holiday weekend with the USD managing to maintain its Thursday gains made on the back of the firmer Philadelphia Fed and CPI data, notes BNP Paribas.
“The calendar is quieter this week, with Thursday’s March durable goods report the main focus. We expect a solid report as weather effects fade, projecting ex transport orders gains to reach 1% m/m for the first time since May 2013,” BNPP projects.
“US two-year yields have pushed back towards 40bp and could revisit levels prevailing before the March FOMC minutes around 45bp if data continues to improve in the weeks ahead,” BNPP adds.
How to play it?
“We continue to look for the USD to regain ground against the core low-yielding currencies and remain long USDCHF. We also see scope for the USD to regain some ground vs. the higher yielders as carry trade positions built early in Q2 come under pressure,” BNPP advises.
BNPP maintains a long USD/CHF position as a trade recommendation from early April from from 0.8844, with a stop at 0.8690, and a target at 0.92.
BNP Paribas
