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Sergey Golubev, 2015.06.21 11:48

Morgan Stanley: Outlooks For USD, EUR, JPY, GBP and AUD (based on efxnews article)

USD: Neutral

"We remain medium-term USD bulls, but we continue to believe USD will struggle in the near term. We believe inflation readings will have more importance with employment bouncing back but core inflation remaining low. Should inflation start materially surprising to the upside, the Fed may need to reconsider its plan for a very muted hiking pace."

EUR: Bearish

"We remain bearish EUR over the medium term, but see scope for near term support. Should European equities sell off as concerns about Greece rise, European investors would need to buy back their short EUR currency hedges. That said, Greece remains a major risk and tensions are escalating, which could drive markets to increase the risk premia in the price of EUR, weighing on the currency."

JPY: Bullish

"We believe JPY is likely to be one of the outperformers over the next few weeks, due to a few factors."

GBP: Neutral

"GBPUSD is being mainly driven by rate expectations. The strong wage data this week should bring forward the first rate hike in the UK and keep GBP supported. We particularly like buying against more vulnerable crosses."

AUD: Bearish

"We remain bearish on AUD as we expect risk appetite to soften amidst rising volatility and tighter liquidity, removing support for carry currencies. What’s more, the RBA suggested there is scope for further rate cuts, and specified the need for further currency depreciation going forward. With external and domestic factors both suggesting AUD should be lower, we remain bearish."