BNP: G10 commodity currencies supported by continued metals rally: FXWW

From the FXWW Chatroom: Metal prices continue to rally toward 2015 highs, leading iron ore prices higher in sympathy (Chart 1). G10 commodity currencies remain supported as a result, despite weakness in equities.

NZD has the most scope to gain from a recovery in risk appetite, in our view – market positioning in NZD is flat (Chart 2), while BNP Paribas STEER™ suggests that NZDUSD is the commodity bloc pair most likely to benefit from a recovery in global equity markets. The market is already long CAD and AUD, and with Canadian 2y yields at 4-year highs and the market pricing in the BoC to deliver the most tightening of all the G10 central banks over the next 18 months, CAD appears to have less scope to benefit.

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