High conviction trade outlook for the antipodeans: bullish Aussie - Westpac

Analysts at Westpac offered a high conviction trade outlook for the antipodeans.

Key Quotes:

"AUD and NZD remain our highest ranked currencies based on our model, macro and technical signals though our conviction levels have fallen noticeably compared to last week. Our overall NZD score just edges out AUD but that is mostly a function of our model, which favours NZD for the higher yield and stronger growth signal. Against that our macro scores are more cautious on NZD compared to AUD. Why? Markets will be reluctant to buy the NZD with conviction within two weeks of a rate cut whereas in AUD’s case clearly stronger commodity prices favour AUD outperformance near term. Our buy NZD/CHF signal from last week was filled at 0.7080 but now that our overall NZD conviction levels have slipped below our threshold we exit that position (0.7124) for +0.62%."