Currency investors should consider selling NZD/CAD this week, advises CitiFX in its weekly FX pick to clients.
"Short NZDCAD represent expectations on oil, a more optimistic BOC, and our greater caution on the valuation of NZD currently. Additionally we tend to weight our global view by most bearish on Asian cycle, most bullish on the Americas, with Europe struggling somewhere in between. Citi Flows highlights that leveraged views on Asian currencies is becoming less optimistic weekly.
...When it comes to the NZD, we want to point out that NZ equities are outperforming other indices. The ToT for New Zealand remains weak, and the currency strong, so it is not clear to us that equity strength can be sustained on the basis policy expectations alone. One should give, and we suspect the market will increasingly look at ways to sell NZD ahead of the RBNZ on April 28th," Citi says as a rationale behind this call.
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"Short NZD/CAD: 0.8851, target 0.87, stop loss .8950," Citi advises.