Westpac likes the NZD: "Buying NZD/CHF thus seems to be the safer bet"

    Shutterstock photo

    From the latest Westpac "High Conviction FX Trades"

    AUD and NZD ...  our model, macro and technical signals pushing strongly back in their favour 

    Aussie's domestic fundamentals are strong

    • Fading pricing for an RBA easing
    • Steady growth
    • Diminished terms of trade drag (Australia's commodity export price basket at its highest levels since Nov 2014)

    New Zealand:

    • Activity remains strong across almost all sectors
    • Confidence among businesses and consumers is high
    • Dairy sector is seeing green shoots (pace of price gains remains more muted)

    Westpac's model "goes long NZD in a big way, +26.8% of the portfolio"

    • Against the USD, NZD suffers from a declining interest rate advantage, likely to narrow even more
    • We remain upbeat on the USD
    • Buying NZD/CHF thus seems to be the safer bet, our process much more negative CHF than USD (see table below).  
    • We buy NZD/CHF at 0.7080, stop 0.6995


    In brief, the banks "High Conviction Trades" blends recommendations from our G10 FX quant model, macro analysis and technical analysis.

    The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

    This article appears in: Investing , Forex

    More from ForexLive




    Follow on: