Credit Suisse trade of the week: Sell GBP/AUD

Credit Suisse expects UK budget to weigh

Currency investors should consider selling GBP/AUD this week, advises Credit Suisse in its weekly FX pick to clients.

"Rationale: We expect an austere UK budget to weigh on GBP this week, especially if it comes with a downgrade to the treasury's UK GDP growth forecasts.

While a dovish tone at Thursday's BoE meeting will not be a surprise , we expect the MPC to indirectly continue to provide the green light to further sterling weakness.

AUD is likely to be more resilient in G10 this week compared to peers like CAD, which risk being more sensitive to a slightly hawkish tone from the Fed.

Risks: to the trade could be if the BoE or UK budget surprise in a way we do not expect," CS argues.

Last week, we brought you a trade of the week from Morgan Stanley in NOK/JPY. It was stopped out.

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