FXStreet (Barcelona) – The FX Strategy Team at BNP Paribas note that the USD requires support from US data ahead, and forecast the May retail sales data to see a 1.2%mom headline rise, and remain positioning for a long dollar view versus CHF, JPY and EUR.
Key Quotes
“On Thursday the focus shifts back to US data with the release of the key May retail sales report. We view that the dollar increasingly needs support from domestic data that should ultimately convince the bond market that the Fed will be in a position to hike earlier – and faster – than what is currently priced in.”
“Strong auto sales, higher gasoline prices and robust core sales support our economists’ forecast for a robust 1.2% m/m headline rise.”
“While we acknowledge that the recent false starts for the USD may be restraining the market’s appetite to rebuild USD longs, a rise in 2y yield above the late-December high of 74bp would be a clear bullish signal for the dollar.”
“We are cautious of spot recommendations given recent volatility but remain positioned for upside in the USD vs. the EUR, JPY and CHF via derivatives recommendations.”
(Market News Provided by FXstreet)