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Goldman Sachs maintains a short NZD/CAD position in spot targeting a move towards 0.7850.
- "We have been arguing that short NZD/CAD is a good expression for this kind of environment; an aggressive Fed and BoC, a strong US Dollar, and growing policy-driven recession concerns should continue to benefit CAD, while NZD suffers from a weak broader risk backdrop. The RBNZ presents a potential headwind to this trade, as its communication has been more hawkish than expected; however, we think CAD's betas to both Fed policy and USD should remain the biggest drivers," GS notes.
- "Therefore, we continue to recommend being short NZD/CAD, and see marginally better entry levels now, especially following the recent extension of our trade target," GS adds.
NZD CAD chart shows that its dropped a long way.
