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G10: Long High Beta FX With Long GBP & AUD Against EUR – Nomura

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What G-10 pairs are looking favorable in the medium-term?

Here is their view, courtesy of eFXdata:

Nomura likes long exposure in AUD vs EUR (short EUR/AUD), and in GBP vs EUR (short EUR/GBP) as medium-term trades.

“Correlation regime changes come and go: it seems the phase of higher US yields pushing the USD higher is already over…We thought the breakdown of EUR to risk sentiment last week was another warning to expect a further pullback and bought 1.19 puts . We caught the break below 1.20 but missed the bounce back,” Nomura notes.

“While we have been caught in what we can only describe as a short-term positioning washout, it is still the case that our medium-term view of a weaker USD remains firm. Rather than holding long EUR/USD positions right now we prefer long high beta FX longs with long GBP and AUD against EUR as a funder,” Nomura adds.

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