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Morgan Stanley went long GBP/AUD at the NY....>

FOREX: Morgan Stanley went long GBP/AUD at the NY close on Thursday with a
target of AUD1.9500 and a stop at GBP1.7900.
- MS maintain "that AUD remains on a bearish trajectory as rising global funding
costs make AUD particularly vulnerable to a pullback given its sensitivity to US
wholesale funding costs. Australian data continue to worsen, particularly
relating to the housing market as seen in much weaker-than-expected building
approvals. GBP should continue to gain, though, as political momentum toward a
Brexit deal remains. Oil prices staying supported also bolster GBP given its
high correlation to oil prices. UK real yields continue to rise due to a
combination of continued gradual normalization and data remaining robust, as
seen in housing and PMI data recently. Key risks to this trade include an
unexpected breakdown in Brexit negotiations, weighing on GBP, or an improvement
in Australian data keeping AUD supported."
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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