29 Apr 2015
Long USD and NZD vs. JPY ahead of policy meetings - BNP Paribas
FXStreet (Bali) - The FX Strategy Team at BNP Paribas recommends going long USD and NZD vs. JPY ahead of the policy meetings.
Key Quotes
"A raft of policy announcements is due tomorrow: the FOMC, RBNZ and BoJ will take centre stage. The FOMC will be a key focus and we remain of the view that the risks are skewed to a USD friendly reaction given how little tightening is priced in over the next six months. We expect the RBNZ to leave rates on hold and think that a neutral message could bolster the NZD."
"We entered a short AUDNZD recommendation at 1.0225 in the past week, targeting a move down to 0.98 in the cross in addition to an existing long NZDJPY options trade. In Japan, our economists see little appetite for further easing by the BoJ despite slumping inflation expectations."
"Notwithstanding this, we think the risk-reward of being long USDJPY is attractive into the meeting. We added a recommendation to buy short-dated 25-delta USDJPY calls last week."
Key Quotes
"A raft of policy announcements is due tomorrow: the FOMC, RBNZ and BoJ will take centre stage. The FOMC will be a key focus and we remain of the view that the risks are skewed to a USD friendly reaction given how little tightening is priced in over the next six months. We expect the RBNZ to leave rates on hold and think that a neutral message could bolster the NZD."
"We entered a short AUDNZD recommendation at 1.0225 in the past week, targeting a move down to 0.98 in the cross in addition to an existing long NZDJPY options trade. In Japan, our economists see little appetite for further easing by the BoJ despite slumping inflation expectations."
"Notwithstanding this, we think the risk-reward of being long USDJPY is attractive into the meeting. We added a recommendation to buy short-dated 25-delta USDJPY calls last week."