Short Aussie, Long Yen Is the Hot New FX Bet for Trade War

Citigroup, JPMorgan Asset expect Australia’s dollar to weaken
Oanda’s Halley says Aussie-yen can easily decline below 70

Simon Smiles of UBS’s wealth-management division talks about the U.S.-China trade disputes and markets.(Source: Bloomberg)

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By Ruth Carson

May 21, 2019 at 11:00 PM UTC

Updated on

May 22, 2019 at 9:00 AM UTC

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Short Australia’s risk-sensitive currency against the haven yen. That is emerging as one popular currency trade as investors look to profit from the U.S.-China trade war.

With the conflict escalating, Citigroup Inc. predicts the Aussie-yen will slip to about 72.75 in a few weeks, which marks a drop of more than 4% from a level of 76.07 in Asia Wednesday. Jeffrey Halley, a 30-year currency trading veteran and market analyst at Oanda Asia Pacific Pte, reckons the pair could fall below 70 in the next two months.