"Insurance against an early hike:
As long as the markets have to deal with the prospect of the Fed hiking rates, the USD should remain supported. However, USD strength should be limited and difficult to trade suggesting to us to look into alternative currency pairs which would rally too should the Fed hike rates early.
We think bullish EUR crosses should do well for other reasons too, but an early Fed rate hike would certainly add to upside momentum.
EURCAD, EURAUD or EURKRW are good candidates to rally from here. Our trade of the week is to be long EURCAD," MS says as a rationale behind this call".
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