- The USD still looks mightily unattractive after last night’s FOMC meeting and will probably remain friendless in the FX community for another while yet.
- EUR and GBP are at very elevated levels already after rallies of over 10% in the last two months;
- the AUD is directly linked in the market’s eyes to all things China-related so worries about property bubbles, the upcoming election and the already high AUD/USD spot rate are certainly potential negatives there;
- Sovereign names keep selling CAD and I’m not going to fight them
- which leaves the CHF and the JPY. We saw strong moves on the crosses overnight with EUR/CHF falling over 100 pips and EUR/JPY likewise.
Conclusion: If in doubt, buy CHF and JPY.