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23 Apr 2014
Tactical long in AUD/NZD - JPMorgan
FXStreet (Bali) - A number of key releases during last week were supportive of tactical longs in AUD/NZD and the medium-term view of a lower NZD and AUD vs. USD, notes Jan Loeys, FX Strategist at JP Morgan.
Key Quotes
"Dairy prices registered their 5th successive decline at the GDT auction, reaching their lowest levels in nearly a year and suggesting that New Zealand’s terms of trade have peaked. In addition, New Zealand’s CPI printed below consensus thus limiting the extent to which rate differentials can provide support for the currency. NZD still appears rich on our valuation models."
"Finally, AUD appears to be currently well adjusted to the slowing in China growth thus far and the central bank has resisted talking down the currency. Thus, we hold on to tactical long in AUD/NZD."
Key Quotes
"Dairy prices registered their 5th successive decline at the GDT auction, reaching their lowest levels in nearly a year and suggesting that New Zealand’s terms of trade have peaked. In addition, New Zealand’s CPI printed below consensus thus limiting the extent to which rate differentials can provide support for the currency. NZD still appears rich on our valuation models."
"Finally, AUD appears to be currently well adjusted to the slowing in China growth thus far and the central bank has resisted talking down the currency. Thus, we hold on to tactical long in AUD/NZD."