6 Dec 2013
Flash: And for 2014 for AUD and NZD - TDS
FXstreet.com (London) - Annette Beacher, strategist at TD Securities said,
"Without a doubt being short AUDNZD is a crowded trade".
Key Quotes:
"...it was an extremely profitable position with the cross rate of 1.25 earlier in the year depreciating fairly rapidly to the current level of 1.101".
"But where to from here? We remain with our cross rate target of 1.09 by March 2014, although acknowledge this could be reached in the coming weeks as this rate can frequently overshoot".
"...with the RBA remaining cautious, expressing a soft easing bias with each set of RBA Board minutes, we can see the net short position remaining in place until at least mid-2014. Our end-2014 target of $US0.87 relies on capital seeking yields elsewhere, particularly in the USD".
"We expect positioning for the NZD to eventually reverse. As +100bp of hikes are already priced into the forward strip over the coming year, the risk of an upside surprise on the cash rate is highly unlikely. Subsequently, as we
head into the second half of 2014, we expect capital flow to seek yields elsewhere, and supports our year-end NZD target of $US0.77, with downside risk".
"Without a doubt being short AUDNZD is a crowded trade".
Key Quotes:
"...it was an extremely profitable position with the cross rate of 1.25 earlier in the year depreciating fairly rapidly to the current level of 1.101".
"But where to from here? We remain with our cross rate target of 1.09 by March 2014, although acknowledge this could be reached in the coming weeks as this rate can frequently overshoot".
"...with the RBA remaining cautious, expressing a soft easing bias with each set of RBA Board minutes, we can see the net short position remaining in place until at least mid-2014. Our end-2014 target of $US0.87 relies on capital seeking yields elsewhere, particularly in the USD".
"We expect positioning for the NZD to eventually reverse. As +100bp of hikes are already priced into the forward strip over the coming year, the risk of an upside surprise on the cash rate is highly unlikely. Subsequently, as we
head into the second half of 2014, we expect capital flow to seek yields elsewhere, and supports our year-end NZD target of $US0.77, with downside risk".