2 May 2014
Selling AUD best hedge against China or volatility pick-up - SocGen
FXStreet (Bali) - Sebastien Galy, Senior FX Strategist at Societe Generale, notes that under present conditions, selling AUD is possibly the best hedge.
Key Quotes
"G10 FX volatility is plumbing lows not seen since before the Great Financial Crisis, and only seen briefly then. Policy rates stuck close to the zero bound in the US, Euro area, UK and Japan are to blame."
"This is good for EMFX and equities, but it’s not doing much for G10 FX price action. The biggest G10 winners year-to-date are the AUD and NZD. I reckon they’ve both done enough and while NZD is simply overvalued, selling AUD is perhaps the best hedge against either bad news in China or a volatility pick-up."
Key Quotes
"G10 FX volatility is plumbing lows not seen since before the Great Financial Crisis, and only seen briefly then. Policy rates stuck close to the zero bound in the US, Euro area, UK and Japan are to blame."
"This is good for EMFX and equities, but it’s not doing much for G10 FX price action. The biggest G10 winners year-to-date are the AUD and NZD. I reckon they’ve both done enough and while NZD is simply overvalued, selling AUD is perhaps the best hedge against either bad news in China or a volatility pick-up."