This via Westpac in their 'Macro FX ideas' (11:54PM, 04 Apr 2017)

  • AUD's appeal has been dented, iron ore prices now down more than 16% since mid-Feb, key data points such as jobs and retailing paint a tepid growth story and the RBA's statement betrays more concern on the labour market.
  • AUD is among the best performing major currencies year to date against the USD but it looks out of whack: the currency shares the top 3 slots with the more defensive JPY and CHF while AUD's commodity cousins NZD, NOK and CAD take the bottom 3 slots.
  • The BoC meets next week (12 April) and while they're unlikely to jettison downside risks given ongoing uncertainties around Trump's trade and fiscal policies the BoC has no choice but to upgrade its 2.1% GDP growth forecasts for 2017 and 2018. Our data surprise index for Canada is at 18 year highs and while that is a point of vulnerability for CAD when it rolls over very little if any of the much improved growth pulse has been priced into CAD.

Their trade is:

  • Entry: Sell 50% at market (1.0157), Sell 50% at 1.0215, Stop: 1.0270, Target: 1.0050

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