EZ downgrades could well be ultimately bullish AUD, CAD, etc

Author: Sean Lee | Category: News

The last time we saw a round of Sovereign downgrades in Europe, there was eventually a big rally in the AUD/USD as reserve managers needed to shift some of their exposure out of Europe and into bonds like Australia and Canada. Whilst we may see a short-term sell-off in the AUD based on risk sentiment, I’d be careful because if the reserve managers return trying to buy in size like they did in January, we could see another 1000 pip rally!

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