What Societe General is looking for
Societe Generale Research discusses the USD outlook and flags some tactical trades to play USD weakness in the near-term.
"If the US curve flattening represents more than just an oversized short position in Treasuries, and tells us something about shifting expectations about the future outlook for the US economy, then it isn't 'good' for the dollar...
We still think EUR/GBP is trapped in a range as more and more mud is thrown into the Brexit waters. EUR/USD needs to break 1.1530 to send significant positive signals, and needs some better domestic news for that to happen," SocGe argues.
"If we're moving to dollar softness rather than having any reason to buy the euro, we'd rather be short USD/PY, USD/NOK or USD/CAD than be long EUR/USD here," SocGen advises.
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