The NZD has made very big gains against the EUR and GBP over the last 48 hours with the carry trade coming back into favour with macro type hedge funds. We can expect more of the same in coming weeks and I’d suggest that selling rallies in GBP/NZD in particular (weak GBP sentiment heading into the general election) should prove to be a profitable strategy.
AUD/NZD is consolidating as expected between 1.00/1.02 but I expect this pair to also break lower below parity in coming weeks.
The RBNZ might have intentions to try and hold the cross above parity but if the SNB can’t do it, then the RBNZ shouldn’t even consider this fool’s option!
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