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Dec 17 - 12:55 AM

Credit Agricole: Buy AUD/NZD on Dips Below 1.10 - A Top Trade for 2025

By eFXdata  —  Dec 16 - 04:30 PM

Synopsis:

Credit Agricole recommends buying AUD/NZD on dips below 1.10, supported by relative rate dynamics, potential trade policy shifts, and resilient Australian fundamentals.

Key Points:

  • Relative Rates:

    • The RBA maintains a tighter policy stance compared to the RBNZ due to elevated Australian inflation.
    • The RBNZ is focused on stimulating growth amid stable inflation expectations.
  • China Tariffs Impact:

    • AUD/NZD diverged from relative rates during Trump’s first term due to US-China tariffs.
    • Credit Agricole expects lower-than-promised tariff levels amid potential trade negotiations, easing pressure on AUD.
  • Trade Recommendation:

    • Entry Level: Buy AUD/NZD on dips below 1.10, targeting 1.09 for optimal positioning.
    • Risk Consideration: Expect volatility amid ongoing US-China trade talks.

Conclusion:

Credit Agricole sees value in AUD/NZD long positions on dips, driven by favorable relative rate dynamics and a potentially less aggressive US-China trade stance.

Source:
Crédit Agricole Research/Market Commentary

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