The firm says that the aussie can make strides against its G-10 peers
In a note by chief currency strategist, Kit Juckes, "after two years of fiscal surpluses and a current account surplus in recent quarters, the country (Australia) is in better shape to weather the current crisis than most".
Adding that as China reopens its economy, Australian trade will be helped as well.
The other argument pointed out is more to do with valuation as they see the current levels of AUD/NZD and AUD/USD being too low, especially the former.
On AUD/NZD, Juckes says that "given relative fundamentals and if markets are getting more orderly, this is a trade that should perform".
Meanwhile, the firm also sees EUR/GBP shorts as attractive but argues that the aussie has the foundations to outperform so shorting GBP/AUD is "a good trade too". Noting that:
"It broke above 2 for the first time since the Brexit referendum last month, and I doubt that's sustainable unless EUR/USD drags GBP/USD a lot higher (which the Eurogroup meeting has rendered unlikely!)".
