Top Trades For 2018: Buy EUR/USD, Buy AUD/NZD, Sell USD/CAD – SocGen

While we still have quite a few big events this week and the next, 2018 is just around the corner. What trades will take the lead in 2018? Here is the view from SocGen?

Here is their view, courtesy of eFXnews:

Societe Generale Cross Asset Strategy Research is out with its top FX trades for 2018 which includes 3 trades in spot (Long EUR/USD, Long AUD/NZD, and short USD/CAD). The 3 trades are structural-based that are meant to express SocGen’s thematic views through the next 6 to 12 months.

Long EUR/USD: “After a hiatus of a few months, we expect the euro’s rehabilitation to resume, albeit unevenly, in 2018. It’s cheap, and while it needs higher Bund yields to propel it higher, a 35bp starting point gives yields room to rise,” SocGen argues.

Long AUD/NZD: “AUD/NZD has been stuck in a 1.00-1.15 range for four years now, but as the commodity cycle bottoms, we think there will eventually be a break higher. The RBA is closer to tightening policy than the RBNZ, even if neither is very close,” SocGen adds.

Short USD/CAD: “We think fair value for USD/CAD is closer to 1.20 and expect a gradual move back towards that level as long as NAFTA survives and oil prices remain in their current range,” SocGen argues.

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