Goldman Sachs targetting NZD/CAD towards 0.7850

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Goldman Sachs maintains a short NZD/CAD position in spot targeting a move towards 0.7850.

“We have been arguing that short NZD/CAD is a good expression for this kind of environment; an aggressive Fed and BoC, a strong US Dollar, and growing policy-driven recession concerns should continue to benefit CAD, while NZD suffers from a weak broader risk backdrop. The RBNZ presents a potential headwind to this trade, as its communication has been more hawkish than expected; however, we think CAD’s betas to both Fed policy and USD should remain the biggest drivers,” GS notes.

“Therefore, we continue to recommend being short NZD/CAD, and see marginally better entry levels now, especially following the recent extension of our trade target,” GS adds.

NZD CAD chart shows that its dropped a long way.

This article was originally published by Forexlive.com. Read the original article here.