Credit Agricole CIB FX Strategy Research discusses its outlook for the FX market next week, noticing that the thematic focus would be on the inflation data releases from the US, Canada, UK, and the Eurozone.
In the US, CACIB thinks that the USD may get little help from US inflation data given that CACIB doesn't expect any acceleration in the core CPI reading.
In Canada, CACIB thinks that the CAD should be in a better position to benefit from any pick-up in inflation and maintains a short USD/CAD* position.
In the UK, CACIB believes that the UK CPI could put the BoE's view that inflation is close to peaking to test, arguing that it remains to be seen whether any evidence of a persistent inflation overshoot would help GBP on a re-pricing of the BoE’s rate outlook.
Finally in the Eurozone, CACIB notes that the final HICP print may help investors to focus their attention on the likely positive impact from higher-than-expected oil prices and the weaker EUR TWI on the near-term inflation outlook. CACIB keep EUR longs against both USD* and CHF*.
Source: Credit Agricole CIB ResearchOriginal Article
