AUD,NZD/GBP crosses

Rumour has it…

Some of the bigger FX hedge funds have not had a great year and with only 3 months left, they are very keen to find that elusive trade which will save their bonuses. I’m hearing from one of the biggest prime brokers that short AUD might well be the trade of choice with USD, EUR, and GBP seen as the likely counter currency. I mentioned earlier this morning that an ex hedge fund and interbank prop trader is starting to build a GBP/NZD long position and it would not surprise me if he is talking to exactly the same people that the PB is speaking with. The market is still slightly long of AUD overall and there’s a long way to go before it can get itself to significant short positions so if you’re a medium term AUD bear, now would seem to be the time to start building.

  1. i had heard they are selling eurusd near highs… hedgefunds, i dont know if they are the same ones.. couldnt they be as well be selling eurusd?

  2. There are about 350 hedge funds who are active in the FX mkt pretty much on a daily basis, ranging from algos, through short-term jobbers, swing traders, technical analysis guys, and of course the big macros. Its the big macros we need to watch as they can take positions of $10billion++ and if 4 or 5 of them all play the same way then they will move the mkt appreciably.

  3. Interesting. If we break the barrier of 1.01x, then we are set to meet the 0.97 in this pair. It’s a harmonious trade since everybody will be happier with a weaker AUD. But I don’t expect the 1.01x level to cede so easily. I would wait possibly a rally on Friday after the NFP to enter short. Currently the conditions are here for a rally in the AUD imho.

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