Société Générale refrains from recommending explicit short USD positions for now, citing policy-driven disruption in FX markets. Instead, they favor tactical long AUD and short CHF exposure, anticipating benefits from trade thaw and reduced geopolitical tension.

Key Points:

• USD view neutral for now: Despite President Trump’s desire for a weaker dollar and rising US yields, SocGen expects EUR/USD and USD/JPY to stay range-bound until late summer.

• Market uncertainty: Disconnected relationships between FX and rate differentials—similar to 2022—suggest traders are reacting more to political signals than fundamentals.

• AUD bullish bias: SocGen favors being long AUD amid signs of improving US-China trade dynamics.

• CHF bearish bias: Recommends short CHF positioning, expecting a decline in safe-haven demand as geopolitical risk potentially eases.

Conclusion:

SocGen avoids a direct USD short stance but sees selective opportunities: long AUD as trade tensions ease and short CHF as geopolitical risk subsides. Broader USD weakness is more likely after the summer once clearer policy and data signals emerge.

For bank trade ideas, check out eFX Plus. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. Get it here.

Later this year,
ForexLive.com
is evolving into
investingLive.com, a new destination for intelligent market updates and smarter
decision-making for investors and traders alike.