UBS views on EUR, GBP, USD, CHF … they most prefer the Australian dollar

From UBS some snippets on EUR and the European Central Bank, and on other FX also:

  • Most G10 currency pairings are now back in familiar ranges (e.g., EUR/USD between 1.0500 and 1.1000), where we expect them to remain in the coming months.

Indeed, UBS is looking to sell EUR/USD around 1.0950/1.1000, expecting the recent softer data to weigh on the pair. UBS add they see an ECB rate cut by June.

But, as for the dollar further out:

  • Better relative growth in the US than in Europe and a partial reversal of US rate cut expectations should support the Greenback in the near term. However, the Fed’s dovish pivot is likely to limit the extent of any rallies and sets the tone for the Dollar to weaken into year-end.

So, if EUR and USD both to dribble lower … what goes up?

  • UBS see lower GBP/USD also
  • and downside risk in USD/CHF, GBP/CHF, USD/JPY

But, UBS says their most preferred currency is AUD. I posted on JPM’s reasoning on the AUD yesterday:

This article was written by Eamonn Sheridan at Source