Credit Agricole: USD remains a buy, Focus on data – eFXnews

FXStreet (Barcelona) - The eFXnews Team notes that Credit Agricole sees any USD dips as a buying opportunity into Friday’s US NFP data release.

Key Quotes

“The USD has been capped of late, mainly due to rising uncertainty as related to Friday’s labour data. This is mainly due to yesterday’s weaker than expected Chicago PMI reading, which is taken as an indication for more muted hiring activity.”

“Nevertheless, we remain in favour of buying dips, although in order to trigger more sustainable upside from the current levels accelerating growth momentum may be required in order to compensate for a stronger currency’s dampening impact on inflation expectations.”

“This suggests that further improving labour market and wage price developments are required in order to make a case of further rising investors’ Fed rate expectations.”

“Ahead today the main focus will be on the ISM Manufacturing PMI and the ADP job report. Although our economists expect Friday’s labour data to surprise positively they see scope for a disappointment when it comes to the ADP report. Under such conditions any weaker than expected data related dip may prove a buy.”

“In terms of trade recommendation we stay long USD/CAD.”

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