Analysts at Nomura noted that AUD underperformed this week, and we think it prudent to close out of our long AUD/NZD positions.
"Communications from the Reserve Bank of Australia (RBA) have turned more cautious since early May in our view."
"This includes comments from the RBA governor about wanting the RBA to be a “source of stability and confidence”, increasing the focus on risks to the RBA’s benign central case, and a speech this week that market participants have interpreted as suggesting that the cash rate may be kept unchanged (rather than go up) for longer than previously expected."
"Lacklustre China data and weak Australian data are turning market sentiment more negative on the AUD."
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