EUR/AUD: Circuit breaker - Nomura

AUD continues to fall out of favour, breaking out of established ranges on a number of crosses, according to Peter Dragicevich, Research Analyst at Nomura.

Key Quotes

“In our view, the headwinds have yet to reach maximum force and AUD underperformance may continue in the near term. Positioning measures remain skewed, momentum in industrial metal prices has turned, and the soft inflation backdrop points to the RBA remaining on the sidelines for an extended period. We look to tactically position for a further appreciation in EUR/AUD via a 1.5850/1.6100 call spread (expiring on 21 December), offering a 5x maximum payout.”