Investors are recommended to sell NZD/CAD, as New Zealand is expected to cut interest rates, Societe Generale says. "There aren't many developed markets where measurable rate-cut moves are discounted in the year ahead, because few have room to cut. A 25bp fall in New Zealand's rate is however eminently possible," the bank notes. "By contrast, while markets do not price any move in Bank of Canada rates in the period ahead, I can see hikes being priced in if US economic data continue to improve, and that makes the CAD a core long currency for us." Short NZD/CAD appeals, it adds. NZD/CAD trades at 0.8154.
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