##{"id":59322,"date":"2011-12-16T10:29:09","date_gmt":"2011-12-15T23:29:09","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2011\/12\/16\/treasure-chest-go-long-euraud\/"},"modified":"2011-12-16T10:29:09","modified_gmt":"2011-12-15T23:29:09","slug":"treasure-chest-go-long-euraud","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2011\/12\/16\/treasure-chest-go-long-euraud\/","title":{"rendered":"Treasure Chest: Go Long EUR\/AUD"},"content":{"rendered":"

\n\tBy Rudi Filapek-Vandyck<\/span><\/p>\n

\n\tWhat?<\/strong><\/p>\n

\n\tInvestors who agree the underlying trend in the global economy remains to the south in the short term are advised to go long EUR\/AUD.<\/p>\n

\n\tBackground<\/strong><\/p>\n

\n\tAnalysts at FXCM<\/span> note there is increasing evidence of a spread of the euro-contagion to the east. They believe China will be the next big shoe to drop. If correct, this will have serious consequences for the Australian economy<\/p>\n

\n\tFXCM<\/span> believes it will force the RBA<\/span> into a more aggressive monetary policy reversal in favor of further accommodation. This plus the anticipated downward pressure on commodity prices should pull the AUD lower relatively to the euro.<\/p>\n

\n\tIn other words: the euro should weaken as things are likely to get worse first before getting better, but the flow-on effect on the Australian economy should result in even more downward pressures for the AUD.<\/p>\n

\n\tAddding<\/span> to FXCM's<\/span> conviction is the fact that while the euro-zone looks extremely vulnerable right now, this has already largely been priced in by investors. For Australia, however, FXCM<\/span> doesn't think this is equally the case (thus more downside should be expected).<\/p>\n

\n\tInvestors Should Note<\/strong><\/p>\n

\n\tGoing long EUR\/AUD was the favourite<\/span> trading idea at FXCM<\/span> at the beginning of 2011. Alas, that turned out an non-profitable move as the trade failed to show any follow through during the year, but FXCM<\/span> expects it will start to do so into 2012.<\/p>\n

\n\t $\"\"$ <\/p>\n

\n\tTechnical limitations<\/strong><\/p>\n

\n\tIf you are reading this story through a third party distribution channel and you cannot see charts included<\/span>, we apologise<\/span><\/span>, but technical limitations are to blame.<\/em><\/strong><\/p>\n

\n\tFind out why FNArena<\/span> subscribers like the service so much: "Your Feedback (Thank You)<\/a>" – Warning this story contains unashamedly positive feedback on the service provided.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"