AUD/NZD: The US-Iran Trade

Crédit Agricole maintains a bearish outlook on AUD/NZD targeting 1.16, citing a narrowing interest rate differential and easing oil price pressures from a potential US-Iran ceasefire extension.

Key Takeaways

• 1.The firm remains short AUD/NZD, targeting a return to the 30-year average of 1.16 as monetary policy divergence narrows and oil prices soften due to a tentative US-Iran ceasefire extension.
• 2.Japanese yen intervention remains a primary focus, with 160 viewed as the 'line in the sand' for USD/JPY and estimated previous intervention spending between USD 63-67bn.
• 3.Swedish SEK has recovered recently but faces risks from policy divergence between the Riksbank and the ECB, despite Sweden's superior long-term fiscal leeway.

Table of Contents

• Asia overnight
• AUD/NZD: the US-Iran trade?
• JPY: the intervention game
• SEK: not out of the woods yet
• CAD: growing apart really?
• Open trade recommendations
• Key events
• FX Research advanced tools
• Red Mount Analytics

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