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J.P.Morgan Recommend Short AUD Vs. NZD & USD Basket

AUD

J.P.Morgan note that "AUD's propulsion to new highs late in 2020 owed mostly to its commodity beta; even accounting for the upside surprise in that input, AUD/USD overshot by 3% since November. Momentum in risk markets now appears to be wavering, laying bare AUD's poor carry metrics, and an RBA with greater capacity for near-term dovishness than other developed market central banks, including the RBNZ. Next week's RBA communications should deliver a steadfast message of caution, medium-term challenges, and commitment to balance sheet expansion. We sell AUD against a 50:50 basket of USD and NZD in cash (stop loss of 2.5%, Spot ref: AUD/USD at $0.7743, AUD/NZD at NZ$1.0711)."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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