Morgan Stanley are short AUDUSD at 0.7540 TP 0.6900 SL 0.7570

In their latest weekly forex report, Morgan Stanley site a case for the aussie to hit 0.7160 soon.

"AUD should stay under selling pressure: In AUD too, higher global funding costs do matter due to Australia's foreign vulnerability, defined by the size of its foreign liability position and the wholesale funding dependency of its banks (Exhibit 12). The latest budget pumped AUD75bn into infrastructure and imposed a 6bp levy on banks' liabilities. The government partially funding the increased spending through the bank levy has diminished the risk of a near-term sovereign rating downgrade from AAA. However, the tax on bank liabilities should increase domestic funding costs and make domestic funds less available. It should weaken AUD further if the future bank earnings outlook hurts risk-taking behavior and thus negatively impacts inflation or growth."

Australian banks are sensitive to global funding costs. The bank levy could in the long run make sense from a financial stability point of view by dampening asset price inflation, but it also reduces the need for the RBA to hike rates to fight leverage. AUD should come under selling pressure as inflows into the Australian bond and equity markets reduce. In addition, the house price-to-income ratio is extreme in AUD, putting additional pressure on Australian banks should growth moderate from here. A structural decline of broader commodity markets driven by oversupply and China reducing its iron ore demand as financial conditions tighten in the mortgage market, will add to AUD downside momentum. It should not take too long to see AUDUSD test its 0.7160 low reached in December 2016"

When they first took the trade I said their profit target was out with the fairies and that the two key areas were the 2016 support line (0.7300-ish right now) and then the area marking the strong double bottom in 2016 (0.7140/60)

AUDUSD daily chart

To be fair, their patience has started to pay off as they came very close to being stopped out a few weeks ago with their original stop (0.7900 IIRC), and I'm not surprised they've moved their stop down. If their trade does hit the 0.7160 area it will be interesting to see what they do.

In USDJPY, they've also raised their 111.00 bid to 113.00

Limit Order (27-Apr-17)
Entry: 113.00; Target: 120.00; Stop: 109.00
We renew our call for higher USDJPY and raise our buy level to 113. The currency pair has risen rapidly in light of expectations for the Fed to hike rates in June and global risk support. We think Japanese investors are now going to increase foreign bond purchases. If some are even FX unhedged then USDJPY should rise. Global reflation is required for this trade to work over the medium term. The market will be watching the US CPI print on Friday, following the downside surprise from China inflation data.

On the JPY side, the BoJ reaffirmed their commitment to an accommodative monetary policy. The weakness in wage data didn't stop Kuroda sounding dovish and Japan's breakeven rates
have even been rising. The BoJ's yield curve control strategy limits the upside in the JPY.

In summary, Japan's life insurance community currently holds foreign assets with a high FX hedge ratio. As the Fed hikes rates, the cost to hedge may increase, meaning hedges may not be rolled over. The recent decline of hedging costs represents a one-time adjustment. The risk to the trade is the market trading "risk off".