Citi sees a scope for an extension in the recent USD uptrend in the near-term.
"We see scope for the USD to continue squeezing higher in the near term, both against G10 and EMFX. G10 funders should underperform as the funding mix shifts away from the USD toward low yielders," Citi notes.
"Thus, we favor buying currencies of hawkish central banks (USD, NOK, GBP, and NZD), funded in CHF and EUR, as the ECB remains a laggard within the ongoing hawkish tilt of global central banks. We also prefer RV opportunities, including long NOKSEK and GBPCHF, as we maintain our bullish view on oil despite staying cautious on metals," Citi adds.