7 May 2014
Buying AUD/NZD offers attractiive opportunity - RBS
FXStreet (Bali) - Greg Gibbs, FX Strategist at RBS, notes that selling NZD against the AUD looks like a sensible strategy worth considering.
Key Quotes
"RBNZ Governor mentions the "I" word, and gives a strong hint that if the currency remains strong, a hike in June is by no means a done deal (82% priced in)."
"Dairy prices have slid 21% from a peak in Feb, while the NZD is up 5%, suggesting business and consumer confidence may ebb from the current high levels. Wage growth falls to a low in four years further suggesting there is no urgency to hike."
"And then the election comes into view (20 Sep) with an unusual twist for the RBNZ rates and currency policy. Even after the slip in NZ rates today, they may be regarded as 'priced for perfection'."
"Selling a high yielder like NZD in the current environment of 'yield chase' may be hard to do, but selling NZD against another high yielder (like AUD) makes sense."
Key Quotes
"RBNZ Governor mentions the "I" word, and gives a strong hint that if the currency remains strong, a hike in June is by no means a done deal (82% priced in)."
"Dairy prices have slid 21% from a peak in Feb, while the NZD is up 5%, suggesting business and consumer confidence may ebb from the current high levels. Wage growth falls to a low in four years further suggesting there is no urgency to hike."
"And then the election comes into view (20 Sep) with an unusual twist for the RBNZ rates and currency policy. Even after the slip in NZ rates today, they may be regarded as 'priced for perfection'."
"Selling a high yielder like NZD in the current environment of 'yield chase' may be hard to do, but selling NZD against another high yielder (like AUD) makes sense."