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Stay Structurally Bullish On USD, Stay Patient – Credit

“Despite the plethora of USD negative headlines and data in recent weeks – including the more dovish FOMC March meeting minutes and softer US payrolls, ISM and retail sales releases – the USD has proven resilient. We think this is a reminder of the fact that the USD surge over the past few months was more a consequence of a clear dovish policy bias outside of the US – with the ECB clearly leading charge – than a result of Fed tightening expectations. With the ECB and the BoJ still in the process of purchasing assets, and very little evidence of hawkish rhetoric from any major central bank in G10, we think this outlook of policy divergence is directionally unchanged.

We reiterate our structurally bullish USD view and continue to hold USD longs versus a range of G10 and EM currencies in our trade portfolio.

Here is their view, courtesy of eFXnews:

The USD has been resilient for the last 2 weeks despite softer US data April 2015

Still, in the near-term, the recent USD headwinds and the less aggressive Fed tightening scenario now forecast by our economists (The Fed – Held on the Tarmac) suggest patience before adding fresh USD longs – at least until US data surprises show signs of recovery.

And given yesterday’s softer retail sales reading and our expectation for a below-consensus CPI print on Friday, we may not see a material rebound in US data until the April payrolls report due on 8 May. Trade location is now important when it comes to entering long USD positions.”

Matthew Derr, Shahab Jalinoos, & Alvise Marino – Credit Suisse

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.