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Carry-seeking behavior to return - ANZ

FXStreet (Bali) - According to ANZ FX Strategists, the risk environment is likely to improve in the short-term, which should lead to a return of the carry-seeking behaviour.

Key Quotes

"Ongoing US economic improvement is less likely to show up in pure USD strength, and in fact is likely to result in some (perhaps only modest) return to the carry-seeking behaviour that we have seen previously."

"NZD and JPY are our favoured shorts in this environment. JPY because the ‘risk off’ dividend priced into the currency is likely to reduce, and the NZD because it continues to show the largest disconnect in our view between currency valuation and domestic fundamentals."

"In addition for the NZD, our sense is that global investors have generally dropped off the story given how uniform some of the USD moves have been in recent months. The EUR and AUD should strengthen modestly. In Asia, the USD/CNH is likely to remain heavy and much of the rest of the region range-bound."

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