Get 40% Off
These stocks are up over 10% post earnings. Did you spot the buying opportunity? Our AI did.Read how

What's Best To Sell Against The Dollar?

Published 08/07/2015, 06:15 AM
Updated 07/09/2023, 06:31 AM

Focus of the day

The case for being long dollars is now mostly about the US. That is relevant in the case of the Australian dollar. The RBA this week removed the reference to wanting a weaker currency from its monetary policy statement. For months, there has been a reference to expecting further AUD weakness in light of soft commodity prices. The RBA actively promoting a weaker currency won’t prevent it from falling, if the Fed raises rates faster than expected, if the Australian economy weakens further or if commodity prices collapse further, but AUD is no longer one of our favourite shorts.

FX Exchange Rates

There’s a bit of upside in USD/JPY given its correlation with US rates, but if the driver of dollar strength is risk aversion and capital repatriation, the yen won’t be the biggest loser. At the other extreme, the most obvious short is still the Chinese Renminbi, but that it is not a freely floating currency. Its strength is a reason to be wary of commodities, rather than a trade in itself. And a reason to be short at least one of the commodity currencies: I choose NZD in G10.

But the stand-out overvalued currency on this chart is the Swiss Franc, and EUR/CHF is finally edging the SNB’s way. The technical analysis section of this weekly suggests longs in GBP/CHF."

Original post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.