RBS is out with a note outlining some tactical FX trading ideas to play this week.
1- With the BoE out on its own in the ‘First Rate Hike’ race, stay long trade weighted GBP. We particularly favour GBP vs EUR and SEK.
2- A neutral Fed and signs of a stronger recovery are CAD positives. Lower Swedish interest rates and slower growth in Europe can further hurt the SEK. Long CAD/SEK.
3- A solid US payroll number favours a tactical long USD/JPY position.
4- Divergent inflation trends in the Nordics suggests NOK/SEK can retest range highs.