The sell-offs in financial markets are beginning to bite the risk currencies. Both the Australian and the New Zealand dollars are under growing pressure. What is the trade?
Here is their view, courtesy of eFXnews:
TD Research discusses AUD and NZD outlook and notes that a mix of negative risk sentiment, reticent central banks, and softer data momentum have battered the 2 currencies.
“Over the coming days, we see the dollar bloc as best placed to stage a deeper correction, notably as the near-term picture has improved for the greenback.
Outright shorts against the buck should work, but we also like short exposure to the EUR, JPY and even GBP, as the BoE delivered a hawkish message this morning,” TD advises.
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