- Weakest : JPY (Govt bullying BOJ into submission on inflation targets, trade surplus turns deficit), GBP (negative GDP, triple dip + BOE Governor elect says monetary policy not maxed out yet).
- Weak : AUD (some chance of 25 bp RBA rate cut in Feb), CAD (BOC says "modest withdrawal of monetary policy stimulus is less imminent than previously anticipated") and CHF (together with JPY, less safe haven demand given easing in global tail risks).
- Neutral : USD. See chart. Current levels smack in middle of large trading range and smack in middle of a local triangle consolidation.
- Strongest : EUR (improving data, easing in credit spreads, moral high ground adopted by Weidmann + Merkel re: currency depreciation = least likely to take steps to weaken FX, LTRO repayments).
- Therefore, best trade by extrapolation : +EUR / -GBP and -JPY. Voila!. I already have it.
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