Key FX Overview Strategy for the Majors by Australia and New Zealand Banking Group
"OVERVIEW AND STRATEGY: The USD depreciated through June, though overall it remained relatively well supported. The Fed eased market fears once again by emphasising that any tightening path will be gradual, while at the same time firming expectations that the first hike would occur in 2015. However, this reprieve does not present an attractive opportunity to reload carry trades, and the distribution of outcomes remains disproportionately skewed to a stronger USD. In the interim, domestic fundamentals remain in focus and idiosyncratic events will continue to be the primary driver of currency performance."
"THEMES: The euro area is still in need of very loose financial conditions, and a soft EUR is a part of that mix. In this environment, further strength remains constrained, and risks remain to the downside. Conversely, in the UK, signs of a broadening of growth will continue to underpin expectations of policy normalisation and support the GBP. Thematically our view on the AUD and NZD remains unchanged. The outlook for the AUD is looking more balanced, while the NZD remains an underperformer story. In Asia, economic data continues to disappoint and further policy easing is likely forthcoming. Here our bias remains to buy USD/Asia on dips."
