USD: Neutral
"We see scope for USD to remain supported against most currencies in
G10. Data over the past week has been strong, most notably consumer
confidence. At the same time, the market has pushed back the timing of
the first Fed hike due to uncertainty in Greece. We see scope for this
to come forward on the back of a resolution in Greece in either
direction, offering support to USD."
EUR: Bearish
"We believe there is little scope for EUR to rally, regardless of the
outcome in Greece. A ‘No’ vote in the referendum is likely to lead to
Greece exit from the euro over time. The ECB may well have to undertake
aggressive action to stabilize markets, and the enhanced liquidity is
likely to weigh on the currency. On the other hand, a ‘Yes’ vote without
a credible plan for the future, but rather a ‘muddle through’ solution
is likely to keep uncertainty high and reduce appetite for eurozone
assets."
JPY: Bullish
"In an environment of soft risk appetite, we think that JPY is likely to
be an outperformer. Higher volatility is likely to drive some
repatriation flows as well, and we note that portfolio flows have turned
more positive. JPY is the most overvalued G10 currency on a PPP basis,
supporting our view that there is scope for strength. Stronger data mean
the policy tone is changing, and we expect the currency to remain
supported."
GBP: Neutral
"GBPUSD has weakened from Greek risks and weaker-than-expected
manufacturing PMI; however, we still see strength in the more important
services sector. In particular wages here appear to be picking up which
has supported rate expectations in the UK and therefore GBP. We believe
there is potential for GBPUSD to reach 1.60 but prefer buying on the
crosses, in particular against the NOK where an accommodative central
bank highlights the divergences between the two currencies."
CHF: Bearish
"The SNB announced that it intervened following the Greek referendum
announcement. This suggests to us that the SNB is less worried about the
level of EURCHF and intervened more on the anticipation of rapid CHF
strength. While Greek risks remain, the rapid falls in EURCHF are likely
to be limited. We wait for opportunities to buy USDCHF as longer term
we will start to see the negative economic impact of the stronger
currency."
