By eFXdata — Aug 09 - 09:30 AM
Societe Generale Research discusses some of its current preferred trades in G10.
"Focusing on short EUR/GBP and short AUD/NZD. Neither trade is very original. The euro’s best defence (which will limit the downside in EUR/USD) is that the market’s net long is shrinking, but that’s even more true of sterling. EUR/GBP has broken below 0.85 and should trundle slowly towards 0.80 over the medium term," SocGen notes.
"AUD/NZD meanwhile, is heading towards parity. Pressure for RBNZ tightening will remain in place, while the RBA’s dovish bias isn’t even being questioned given the renewed lockdowns. At 36 deaths per million people, Australia’s Covid death toll is less than 2% of the UK’s, but the economic impact will drag on as long as vaccination rates remain low and lockdowns remain the main tool to limit transmission," SocGen adds.
Société Générale Research/Market Commentary