Excerpts from a note via National Australia Bank on the Australian and New Zealand dollars
NAB conclude that July is looking to be good for both. Citing:
- AUD and NZD tend to outperform the USD in July with a low volatility environment a likely supporting factor
- USD has a tendency to underperform at the start of a Fed easing cycle
- commodities well supported by China's stimulus
- PBoC unlikely to weaken the CNY as a policy tool
- speculative community still very short both currencies, further unwinding of these positions could be an added positive factor
As a risk, NAB caution to watch US - China trade tensions.
