Trade Of The Week: Buy USD Vs EUR and JPY
Currency investors should consider buying the USD vs the EUR and JPY this week, We recommend being long USD vs. EUR and JPY going into this week. EUR and JPY are the two most sensitive currencies to both the level of and changes in short-term yield differentials vs. USD. February inflation data from both these regions are expected to keep up their recent pace. Draghi is focusing on the core inflation trend and likely to look through the energy-boosted headline number, while the focus for BoJ this year is whether to raise the 10y target rather than front rates, but this is also likely a fair way off (ie, we expect a hike in Q3). All in all, front-end rates are likely to stay low in both the EU and Japan,” Barclays argues.