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AUSSIE: VIEW: Goldman Sachs note that "as part of the coronavirus fiscal
response, the Australian gov't included a measure that allows eligible people to
access A$10,000 from their pension funds with no penalty in two installments:
(1) between mid-April & FY end and (2) in the next FY (after June 30). In the
weeks leading up to April 20 - the start of the 1st withdrawal period - AUD was
the 2nd-best performing currency globally, only surpassed by IDR. Historical
trading volumes around that period suggest the rally was primarily driven by
pension funds selling overseas equities and converting the returns (of unhedged
holdings) to AUD. We think we could see a similar dynamic in the coming week or
so, ahead of July 1, as funds prepare for another round of withdrawals. Although
there may be more limited need for foreign asset sales than in the 1st round
(given some people that made early withdrawals had less than A$10,000 in their
account and, therefore, cannot participate in the second round), we think net
short AUD positioning leaves scope for a potentially quick reversal on any
upside pressure. More broadly, we continue to like AUD/NZD longs but acknowledge
the trade will be challenged as long as risk sentiment remains choppy."