Short AUD/NOK as G10 trade of the week – Deutsche Bank

By FXStreet Research Team at Deutsche Bank, suggests to go short on AUD/NOK pair as their G10 Trade Idea of the Week with entry being at 6.02 for the target of 5.73 while maintaining a stop loss of 6.18.

Key Quotes

“First, AUD/NOK is the most expensive cross in G10. Second, while Norges is likely done easing, Australian short-end yields remain too high in light of the RBA’s disinflation problem. Even at current rates, the cross is trading too rich to the short-end spread. Third, if the RBA were to be helped by rising global inflation in H2, selling AUD against NOK offers good protection as the latter historically outperforms during inflationary periods. Lastly, we expect oil to outperform iron ore in the coming weeks on demand-supply fundamentals.”
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Source:: FX Street