Research Team at ANZ, notes that the AUD/NZD pair has declined in recent months towards the bottom of its recent range against the run of other indicators. Key Quotes “Rising global risks suggest that this outperformance is not sustainable. While we expect AUD/NZD to remain below long-run averages, current levels offer opportunity for long AUD/NZD exposure. We believe this exposure will benefit both from an intensification of global fears and from a market refocusing on fundamentals. Given our long standing view that parity is a step too far for this cross, we suggest naked short puts with the backstop of taking a long spot position at much better levels if things go wrong, and cheapening up call spreads by selling downside look attractive. Sell 3m 1.05 puts naked for 125pips premium (leaves you long AUD/NZD at 1.0375 if exercised against you) and buy a 1.07-1.10 call spread cheapened by selling a 1.0350 put. At spot 1.0630, this costs 28bps AUD for a 10x payout.” For more information, read our latest forex news.