💱🔺Japanese Desk Goes Long NZD, Short CAD: Cable FX Macro
- Rosbel Durán
- 12 minutes ago
- 1 min read
Currently, markets are factoring in 50 basis points of rate cuts from the Fed by December, which could boost risk sentiment and support high-beta currencies like the kiwi in the short term. Additionally, there is talk that the current pricing by the RBNZ might be starting to appear overstretched. The latest output figure fell short of expectations, leading markets to anticipate further easing from the RBNZ. However, persistent inflation could challenge the accuracy of OCR pricing.
In Canada, consumer prices have also increased at a faster pace than before, but the headline measure appears more stable compared to New Zealand. It is likely that the BoC will disregard this increase and continue to ease policy. Crude oil prices are continuing to decline, with a one-month performance in the negative double digits, likely keeping CAD bulls cautious. Moreover, a trade deal with Canada is still far from being reached.
It caught my attention that a Japanese desk decided to go long on NZD/CAD, with the macro trader targeting 0.8315 and setting a stop at 0.7900. Shorting CAD has been a profitable strategy so far in 2025.
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