Citi: G10 FX

From the FXWW Chatroom: USD: The FOMC statement hardly left a mark. Non-manufacturing ISM today and payrolls tomorrow could stand a better chance – but focus squarely on next week’s election. USD down vs. G10, up vs. EM suggests market pricing higher risk of surprise outcome. Fading either seems an explicit view on election probabilities.
EUR: Pre-election, our view is EUR outperformance on its crosses but underperformance against CHF and potentially JPY. Main drivers for EURUSD are in equilibrium (link).
GBP: Court ruling, services PMI and BoE (preview) fill a busy day for GBP. Lighter positioning should allow investors to sell a rally. Challenge for shorter-term players is that the influence coincides with broad USD underperformance and position cutting.
JPY: No fireworks at BoJ meeting with a short statement and limited new language. Watching core yields for direction, US election could keep USDJPY heavier however before getting past the event with less sway from domestic news.
CAD: Poloz stopped short of rocking the boat, down leg in oil however reinforces confidence in CAD shorts. Further, CAD risks being dragged lower by continued weakness in full time employment.
AUD: AUDNZD decline undercutting AUD, following the RBA rally. Could be some further room for this to run. Tonight’s sees Statement on Monetary Policy and retail sales at 00:30GMT.
NZD: NZD boosted by strong employment report which points to likelihood for a ‘hawkish cut’ next week. Inflation expectations could further support this view, should stabilization be seen in line with some other survey data.
NOK and SEK: Big upside surprise on Sweden PMI not enough to undo big focus on next CPIF print and foreign core yields. This means investors are unlikely to chase SEK broadly higher even if NOKSEK has seen the highs shorter term.
CHF: CHF through perceived soft 1.08 floor, absence of sight deposits build last week suggests resistance to stronger CHF abating. Volatility likely to pick up.

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