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AUD: SocGen recommend trading gradual AUD/USD upside via call spreads

AUD
  • SocGen recommend buying 3m 0.69/0.70 AUD/USD call spread, designed to be held to expiry. 
  • They cite the AUD as possibly being most resilient in the face of USD strength. They write that the RBA is the only G10 CB that is contemplating raising rates in 2H (apart from the BoJ), and technical analysis suggests upwards momentum.
  • SocGen see rates repricing possibly lifting the AUD/USD towards 0.70, and note the negative skew on AUD topside cheapens out-of-the money calls. 

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