- FX investor positioning suggests long USDJPY is a better way to express a bullish USD view than short EURUSD.
- AUDNZD positioning appears stretched. We expect an adjustment in relative positioning to drive the cross down.
- There continues to be considerable scope for long USD positions to be built if Q2 economic data are relatively robust.
BNP Paribas positioning analysis shows close to neutral positioning for the AUD (score of -2). In contrast, positioning in the NZD is a large short, with a score of -36. AUDNZD positioning is, in our view, out of line with
fundamentals. There remains scope for AUDNZD to continue to fall. Despite the NZD’s yield advantage and the current procarry environment, short NZD positioning has continued to rise. Positioning is now approaching its record short exposure.