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Forex Flash: AUD/NZD still a shorting option after RBA surprise – UBS

FXstreet.com (Barcelona) - According to Research Analyst Gareth Berry at UBS, “In the wake of Tuesday’s surprise 25bp cut by the RBA, we recommend remaining sort the AUD/NZD as the cost of carry is minimal, and the alternative ‘sell AUD/CAD’ trade is compromised by policy uncertainty surrounding the transition to a new governor at the Bank of Canada.”

Moreover, the RBNZ has started to sound increasingly hawkish on the back of booming local house prices and Wheeler himself noted overnight that the perception of future policy tightening may add to upside pressure on the currency. Indeed, this does not look like the start of an aggressive FX intervention campaign.

Even the governor himself has modest ambitions, making it clear that he “would not expect the strength of the flows from intervention to materially change the exchange rate, although it could potentially take the top off”.

Session Recap: Euro buoyed by positive data

The euro rose versus the dollar on Wednesday buoyed by better-than-expected German data, as investors perceive another rate cut is less likely. However, EUR/USD remains well within the established range that has held since early April.
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Forex: GBP/USD pares losses to trade at session high at 1.550/27

The GBP/USD has erased its losses, having bottomed out earlier at the 1.5470 region Wednesday during European trading. However, at the onset of the US session, the cross has bulwarked its way ahead, streaming to session highs at 1.5520/27 in these moments, en route to a +0.21% gain above its opening levels.
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