Societe Generale FX Strategy Research argues that FX carry trades look attractive to buy in the near to medium term. In particular, SocGen points to long CAD/JPY, AUD/JPY, NZD/JPY and EUR/JPY.
However, with OPEC making all the right noises, SocGen prefers long CAD/JPY on the ground that it looks lagging oil prices,priced for BOC to remain on hold for a long time and for Canadian growth data to remain soft.
“The risk is that OPEC fail to support prices, but even if we don’t expect a sharp rally they should be able to put a floor under price around here.
CAD/JPY should get back to 85-86,” SocGen argues.
CAD/JPY is trading circa 83.19 as of writing.
Source: Societe Generale Cross Asset Research
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