BNP Parbias trade of the week: Buy USD/JPY

BNP Paribas likes USD/JPY

Consider buying USD/JPY to position for a tactical USD rebound this week , advises BNP Paribas Research in its weekly FX pick.

"We think the USD could rebound this week with several speeches from Fed officials including Fed chair Yellen on 27 June as well as Williams, Harker, Kashkari and Bullard. We expect the Fed to announce the start of its balance sheet reduction program in July, so Fed speakers could start signalling this shift in the near term.

Markets could quickly price in more tightening as market expectations for Fed tightening remain very subdued, with only one further 25bp rate hike priced by the end of 2018. US 10y nominal rates are only moderately above their lows ahead of the June FOMC meeting," BNPP argues.

USD/JPY is trading up 19 pips to 111.47 today.

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