Morgan Stanley client note (via Bloomberg) - in brief
AUD vulnerable to
- slowing economy
- threats to international trade
- rising U.S. funding costs
- neutral positioning on AUD means further selling will have impact
USD
- should be supported by robust US growth
- Positive earnings momentum
- Growth, trade concerns may weigh on investment and liability flows from the US, leading to USD strength
MS trade reco:
Short AUD/USD at 0.7770
- target 0.6900
- stop 0.7910
Risk to the trade is that global funding flows accelerate, leading to USD weakness
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Some interesting and different slant on things there from MS. The sell point on AUD/USD is way away too.
