Barclays Trade Of The Week: Sell USD Against A Basket Of ZAR, TRY and BRL
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Currency investors should consider selling USD against a basket of ZAR, TRY, and BRL, advises Barclays Capital in its weekly FX pick to clients.
"We recommend shorting the USD against a basket of ZAR, TRY and BRL (spot ref: 13.5460, 2.959 and 3.173 respectively), targeting 2% with a stop loss of 1%.
High-yield currencies are likely to continue to benefit from the low-volatility environment, as the risk-on mood probably should continue amid a lack of catalysts.
We expect the USD to trade with a weak tone vis-à-vis high yielding-currencies. The search for yield is in full swing as core yields have continued to set new record lows, making G3 currencies more prone to underperformance, Barclays says as a rationale behind this call.