On Friday's Money In Motion show, we reviewed a trade I have on down under.
Here's an update.
Back on July 15, I recommended selling the Australian dollar against the kiwi, and we went back to the trade on Friday's show.
The recommendation was:
SELL AUD/NZD @ 1.2650
TARGET = 1.2150
STOP LOSS = 1.2825
Here's the whole conversation on videotape.
This was a bet on softening China PMI numbers (which would be negative for Australian exports) and a bet on interest rate differentials between Australia and New Zealand narrowing in favor of New Zealand. Both happened! China HSBC Manufacturing PMI for July was 49.3 and the interest rate spread between Australia and New Zealand narrowed by 75 bps.
- 7/27: 1.2650 Entry.
- 8/10: 1.2320 Low.
- 8/22: 1.2745 High.