Antipodean currencies heading north - BBH

Research Team at BBH, suggests that the feature of today's foreign exchange market is the strength of the Antipodean currencies. 

Key Quotes

“The New Zealand dollar is up almost as much as the yen (~1.2%) and the Australian dollar (0.8%).  The strength of the move is surprising given the fundamental outlook (both central banks are likely to cut interest rates next month) and positioning (speculators in the futures are long, especially the Australian dollar). 

First thing tomorrow in Sydney, Australia's Q2 CPI will be reported.  Barring a surprise, the report is seen as the last hurdle to a rate cut next week.  And the market is even more convinced of an RBNZ cut later in the month. 

The Australian dollar has been finding support near $0.7450 for the last several sessions, which is also at the intersection of a three-month uptrend.  Its recent peak was about $0.7675 on July 15.  The $0.7530 area that is probing in the European morning corresponds to a 38.2% retracement of that decline.  The 50% mark is $0.7560.”