Short NZD/USD (From 29-Aug to 12-Sep)
Real-Time AmpGFX – bought to close NZD/CAD position (Wed 9/12/2018 9:25 AM MT)
Bought one unit of NZD/CAD at 0.8523 to close short position
We were stopped out of a short NZD/USD position on a move up through 0.6553
News reports that the US has proposed new trade talks with China have triggered a recovery in NZD. We have closed our short NZD position to re-evaluate as news unfolds.
Real-Time AmpGFX – lowered stop loss orders in NZD/CAD and NZD/USD (Tue 9/11/2018 11:01 PM MT)
We were stopped out of our short GBP/USD position yesterday on the rise through our stop loss at 1.3058; executed at 1.3059.
Positions
Short half unit NZD/USD at 0.6554; s/l 0.6553; t/p 0.6388 (s/l lowered from 0.6633)
Short one unit NZD/CAD at 0.85825; s/l 0.8563; t/p 0.8063 (s/l lowered from 0.8663)
Real-Time AmpGFX – sold NZD/CAD, closed half short NZD/USD position (Mon 9/10/2018 10:27 PM)
Sold 1 unit NZD/CAD at 0.85825
Bought half unit NZD/USD at 0.6531 (closing half short position)
Comment
We have sold NZD/CAD, anticipating that the US and Canada will eventually, perhaps soon, come to an agreement where Canada joins a three-way NAFTA agreement with the US and Mexico.
CAD has weakened in that last two weeks on the failure of a deal being made, and so it will be more of a positive CAD surprise if one is made. Canada is still benefiting from a relatively strong economy, partly due to its ties to a strong US economy.
NZD may suffer as its economy appears to be struggling, milk futures prices are weaker, and trade tensions between the US and China appear unlikely to improve, proving a drag on Asia region currencies.
We have reduced some of our short NZD/USD position, to allow more room to increase risk in a short NZD/CAD position.
Positions
Short half unit GBP/USD at 1.2918; s/l 1.3058; t/p 1.2388 (Capital at Risk 0.58%)
Short half unit NZD/USD at 0.6554; s/l 0.6633; t/p 0.6388 (Capital ar Risk 0.62%)
Short one unit NZD/CAD at 0.85825; s/l 0.8663; t/p 0.8063 (Capital at risk 0.99%)
Real-Time AmpGFX – Sold NZD/USD after payrolls (Fri 9/7/2018 7:00 AM MT)
Sold half unit of NZD/USD at 0.6554 to add to short position
Comment
I’ll send more info later, but the higher inflation risk in the US, higher US rates, raises pressure on EM markets and may further undermine EM and support the USD.
A key risk is what may or may not be announced on tariffs.
Positions
Short half unit GBP/USD at 1.2918; s/l 1.3058; t/p 1.2388 (Capital at Risk 0.58%)
Short half unit NZD/USD at 0.6679; s/l 0.6633; t/p 0.6388 (s/l lowered from 0.6678)
Short half unit NZD/USD at 0.6564; s/l 0.6633; t/p 0.6388
Real-Time AmpGFX – Bought AUD to close remaining short, lowered NZD/USD stop loss close to mkt (Wed 9/5/2018 3:06 PM MT)
Bought half unit of AUD/USD at 0.7195 to close remaining short position
Lowered NZD/USD stop loss close to market
Comment
The Australian GDP report was much stronger than expected on Wednesday. It appears that the economy has strong momentum (4.1% annualised growth in H1), and while risks may be building we would not be surprised to see a robust trade report later today and business confidence and employment next week.
The AUD has built in a significant degree of the risks arising in the economy from a weak housing market, weaker EM assets and China-US trade relations.
However, Australian export commodity prices have remained solid. The RBA has maintained its upbeat view for the medium term outlook and the GDP report should reinforce their optimism.
There is a risk of a rebound in risk appetite after a period of significant weakness in EM assets. Italian bond yields have fallen in recent sessions. Turkey is expected to hike rates next week.
We see downside risk returning if Trump announces tariffs on an additional $200bn of Chinese goods, as may arise by end week. EM markets and global growth confidence may continue to be challenged going forward as the US raises rates. The US labour market data may be a catalyst for further broad USD strength.
However, we prefer to reduce risk at this juncture. We fear a short-term rebound in AUD and other currencies against the USD, and wish to lock more of our recent profits in what remains a volatile and uncertain environment.
Positions
Short half unit GBP/USD at 1.2918; s/l 1.3058; t/p 1.2388 (Capital at Risk 0.58%)
Short half unit NZD/USD at 0.6679; s/l 0.6633; t/p 0.6388 (s/l lowered from 0.6678)
Real-Time AmpGFX – bought AUD and NZD to close half short position in both after RBA statement (Mon 9/3/2018 10:49 PM)
Bought half unit AUD/USD at 0.7205 to close half short position
Bought half unit NZD/USD at 0.6600 to close half short position
Comment
We had thought that there was a risk that the RBA would acknowledge that the balance of risks have moved away from a ‘the next move in rates was more likely to be an increase’ to a balanced assessment.
However, they have left their policy statement unchanged.
Considering the significant fall in the last week, and proximity to key support around 0.7150, we have decided to take some profit and reduce our risk in both the AUD and NZD.
Positions
Short half unit GBP/USD at 1.2918; s/l 1.3058; t/p 1.2388 (Capital at Risk 0.58%)
Short half unit NZD/USD at 0.6679; s/l 0.6678; t/p 0.6388
Short half unit of AUD/USD at 0.7310; s/l 0.7323; t/p 0.6888
Real-time AmpGFX – sold NZD/USD (Wed 8/29/2018 7:24 PM MT)
Sold one unit of NZD/USD at 0.6679
Comment
The ANZ NZ business confidence survey own activity indicator has failed to bounce from depressed levels seeming to validate the recent fall and make it seem more real rather than a short-term thing.
Business confidence fell sharply from a peak around the middle of last year to lows in December since the GFC in 2009. Its bounced meekly in Q1 but has sunk again. Initially, this might have been a reaction to the change in government, but the fall now has been pervasive, and the risk is growing that the economy slows below trend.
The RBNZ has maintained a relatively upbeat view, but have said they are prepared to cut rates if GDP does not recovery significantly above trend and provide a clearer case for inflation rising sustainably to its target.
The prospect of rate cuts in both Australia and NZ is growing, out of sync with the policy direction in the US, Canada, and even the UK and the Eurozone.
Risks to growth in Asia generally are building as the US continues to ratchet up its trade policy stance against China, even as they may be close to a NAFTA deal.
Position
Short one unit NZD/USD at 0.6679; s/l 0.6773; t/p 0.6388
Short one unit of AUD/USD at 0.7310; s/l 0.7413; t/p 0.6888
Short one unit of USD/CAD at 1.3013; s/l 1.2988; t/p 1.2788