EUR, JPY, USD, CAD: BNP expects positive news for the dollar

The BNP bank expects a strong NFP report indicating 200,000 new jobs, which would coincide with what the Fed calls "continuous improvement".

Next Thursday, we will have the minutes of the last Fed meeting and BNP expects more hawkish information than when Janet Yellen spoke at the press conference.

The combination of these two events should support the dollar but we note that the markets have not been able to integrate into prices an imminent rate hike, within this fragile risk sentiment context. We believe that USD vs vs commodity currency positions offer the best return/risk ratio due to this fact.

Being bullish on the dollar against the euro and the JPY was indeed more difficult since these currencies tend to strengthen in periods of risk aversion. Actions by central banks could suppress this trend, but we don't expect the BoJ to act at its next meeting.

BNP bank believes that the commodity currencies remain the most vulnerable and it remains bullish on the GBP as well, anticipating that the markets will soon strengthen in terms of BoE expectations.