Credit Agricole on the dollar trade
Credit Agricole CIB Research sees a scope for further USD strength into year-end.
"We note that the demand for the currency in the forward markets have been intensifying of late, as reflected in the widening cross-currency basis swap spreads," CACIB notes.
"We think that these developments reflect a number of drivers: (1) the growing USD rate advantage ahead of Fed taper; (2) importers' hedging flows in countries like Japan and the Eurozone that face soaring energy costs; and (3) growing demand for USD funding into year-end as international borrowers try to lock in more advantageous conditions when rolling their FX liabilities," CACIB adds.
For bank trade ideas, check out eFX Plus.
