Commodity bloc short squeeze fades - BNPP

Research Team at BNP Paribas, suggests that commodity-bloc currencies are rallying as short positions are hit by fading Fed rate hike positions and bounces in equity and energy prices.

Key Quotes

“The price action is reminiscent of the bounce we saw in these currencies back in October 2015 as Fed expectations retreated after the soft September employment report. We think these recoveries should be faded, with weak domestic data a potential source of vulnerability as markets continue to price relatively low risk of near-term policy easing.”