We prefer AUD/NZD longs – Morgan Stanley
|Morgan Stanley (MS) speaks bullish of the Australian dollar in its latest report, published late Wednesday.
The US banker said, “We remain constructive on AUD on crosses and think the time to buy AUD/USD outright may be drawing close.”
Hopes of bottoming global and local data were cited as the reason for the optimistic outlook.
“A pick up in local vaccinations should reduce the likelihood of lockdowns and give the RBA scope to keep tapering, while PBoC easing and local fiscal spending should eventually passthrough too,” added MS.
The banker also cites short positions for the AUD/USD weakness and hints at the position squeeze.
Even so, MS remains USD-positive and hence worries for the AUD/USD long but prefers AUD/NZD long.
Read: AUD/NZD refreshes 17-month low after NZ Q2 GDP, focus on Aussie employment
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