Credit Suisse Trade Of The Week: Buy NZD/USD
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Currency investors should consider buying NZD/USD this week, advises Credit Suisse in its weekly FX pick to clients.
"We think higher-yielding currencies in G10 can tactically strengthen against the USD. NZD provides the cleanest near-term pairing, in our view. This week's economic data calendar in New Zealand is lighter than Australia, and there are no scheduled RBNZ speeches this week either (whereas RBA Deputy Governor is speaking on Wednesday).
While markets may be cautious of chasing AUDUSD strength into the soon-approaching RBA meeting (6 September), the RBNZ is relatively far away for now (21 September). There is also no noise from Fonterra milk auctions next week - the next scheduled auction is on 6 September," CS says as a rationale behind this call.
"The main risk to this trade is if markets retrace towards broad-based USD strength," CS adds.
As a technical-based trade, CS is long NZD/USD from 0.7220 targeting a move to 0.7390.*