Societe Generale Research likes short USD/CAD to express USD weakness over the coming weeks.
"Our preferred way to express dollar weakness is probably through USD/CAD, because that’s where long USD positioning is most evident. If this week’s labour report could persuade the RBA’s Philip Lowe to be a little less dovish, long AUD would be less frustrating, too, helped by the outlook for the Chinese economy in the coming months," SocGen notes.
"EUR should rise but speculators are already low, and this will be much more a case of two steps up, one step back. NOK is a volatility-hating currency which ‘ought’ to thrive now, and SEK, GBP, CHF are all less vulnerable to positioning. JPY, however, is subject to different pressures, with the BOJ by far the biggest driver from here," SocGen adds.
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