Long USD, Short AUD, NZD, CAD

[B]My picks:[/B] Long USD, Short AUD, NZD, CAD
[B]Expertise:[/B] Global Macro
[B]Average Time Frame of Trades:[/B] 1 week

With investor’s sentiment shifting towards more risk taking, commodity currencies have been well bid as traders hunt for yield. For instance, in the last 5 months the NZD/JPY rallied more than 1500 pips or 30 percent. However, investor’s expectations that the world economy is decoupling and we will emerge from this recession in the second half of 2009 are somewhat too optimistic. So, I expect higher yielding commodity currencies to be vulnerable to profit-taking going forward because the current model of economic growth, which has been driven by stimulus plans and tax-payers money, is not sustainable. In sum, I’m bullish dollars against commodity currencies (AUD, NZD, and CAD).