This is from Morgan Stanley's latest 'FX Pulse' last week
Their 'bottom line' summary is:
Central bank communication focusing increasingly on flourishing financial conditions suggests that their monetary policy reaction functions may have changed. Tightening central banks want to avoid the 2013 taper tantrum experience, and so it is not surprising to see gradualism and communication staying on top of their agenda. Hence, risk appetite is likely to stay supported as long as the rise in share prices is backed by higher earnings growth expectations. Nonetheless, the bullish risk environment is unlikely to find the same liquidity support as in spring when bonds and shares rose simultaneously. This new policy reaction function suggests higher DM rates and yields, which should allow USDJPY to break higher, and AUD and NZD to trade lower due to their large foreign liability positions. EM may consolidate some of its recent gains, with the credit-weak ZAR coming under particular selling pressure, while TRY is also likely to suffer. We look to sell AUDUSD rallies and stay long GBPZAR.
That, of course, is a very brief expert from a long and detailed note.
Another small snippet, this time their look at the CAD and their 'bottom line' for that:
The balance has shifted markedly toward a rate hike from the BoC next week, based on recent BoC rhetoric. Because a rate increase is almost entirely priced in, we believe a hike in itself should not move CAD significantly. The main driver will be the Governing Council's guidance on the path of rates going forward. We think the BoC will signal an additional hike to closely follow one in July, pushing USDCAD modestly lower, but that the market will overprice rate hikes beyond that, making dip buying in USDCAD attractive from a medium-term perspective. A key point to watch will be changes in the forecast for when the output gap is expected to close - a move to 2017 will be taken as a hawkish signal - and mentions of domestic financial stability risks will garner attention in light of the continued housing sector concerns.
