Trade Ideas Survey: Participants Jump Back on Dollar Train After Pullback

By Bilal Hafeez and Ben Ford
2 min read

We see a big increase in dollar-long positions this week after some profit-taking last week. Participant 7 added long USD/MXN. They see the combination of wider rate differentials and increased political risk in Mexico being a headwind for MXN.

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When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models.

Responses were collected on 12 October 2023.

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Meanwhile, Participant 15 added short EUR/USD after the recent hot CPI and employment reports – they see near-term risks of a rate hike increasing while the risk-reward looks attractive given market pricing. Participant 15 also added short TUZ3 and TYZ3 as alternative ways to play this theme on the rates side.

Lastly, Participant 16 closed long AUD/USD as they looked to take a profit on their tactical trade which looked to benefit from excessive bearishness priced into AUD.

We see the dollar taking a breather over the near term given its recent strong run and extended risk aversion in the market, but remain bullish further out.

Bilal’s Trades and Views

We added two new trades to our model portfolio this week:

Long 10Y BTPs
Long 3m USD/CNH

Current Trades

Long 10Y BTPs (target 4.45%) – read here.

5s10s UST steepener (target 15bps) – read here.

Long EUR/CHF (target 1.02) – read here.

Long USD vs. European Basket – read here.

Pay 1y1y US OIS (target 5%) – read here.

Short US10Y vs. USD Hedged 10Y JGBs – read here.

Short RBA Nov-23 vs. Long RBA Sep-24 (target 20bps) – read here.

Long 1yx1y receiver swaption with a 1yx1y pay fixed swap positions – read here.

Long 3m USD/INR (target: 85.50; stop: 82.0) – read here.

Long 3m USD/CNH (target 7.500; stop: 7.150) – read here.

Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.

Ben Ford is a Researcher at Macro Hive. Benjamin studied BSc Financial Mathematics at Cardiff University and MSc Finance at Cass Business School, his dissertations were on the tails of GARCH volatility models, and foreign exchange investment strategies during crises, respectively.

Photo Credit: depositphotos.com

(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)

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Trade Ideas Survey: Participants Jump Back on Dollar Train After Pullback

Macro Hive Network

Bilal’s Trades and Views

Current Trades

Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.

Ben Ford is a Researcher at Macro Hive. Benjamin studied BSc Financial Mathematics at Cardiff University and MSc Finance at Cass Business School, his dissertations were on the tails of GARCH volatility models, and foreign exchange investment strategies during crises, respectively.

Photo Credit: depositphotos.com

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Trade Ideas Survey: Participants Jump Back on Dollar Train After Pullback

Macro Hive Network

Bilal’s Trades and Views

Current Trades

Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.

Ben Ford is a Researcher at Macro Hive. Benjamin studied BSc Financial Mathematics at Cardiff University and MSc Finance at Cass Business School, his dissertations were on the tails of GARCH volatility models, and foreign exchange investment strategies during crises, respectively.

Photo Credit: depositphotos.com

Enter your email to read this Macro Hive Exclusive

Your comments

Cancel reply

Like these insights? Join our free newsletter for regular updates and trade ideas.

Like these insights? Join our free newsletter for regular updates and trade ideas.

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