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Morgan Stanley Recommend Short AUD/USD

AUD

Late on Friday Morgan Stanley noted that “AUD looks uniquely attractive as an inexpensive risk hedge. AUD is one of the risk demand-sensitive currencies in G10 but also has a relatively low front-end. Meanwhile, Australian mortgage arrears have begun increasing as variable mortgage rates have risen dramatically. While house prices have shown some resilience, our economists expect prices to re-test the recent lows. The risk to this trade is that inflation remains resilient in Australia, boosting RBA policy expectations and AUD.”

  • As such, they recommended entering a short AUD/USD position at $0.6708 with a target of $0.6200 and stop set at $0.7000.
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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