Long NZDJPY and short USD

Kiwi

The RBNZ is tonight and this is the last NZD catalyst for a long time. The market has been riding short Kiwi positions for ages, and the long and variable lags need to be given some time to operate as the RBNZ has cut hard and fast—from 5.5% to 2.25% in less than a year and a half.

The vibes in New Zealand have gradually picked up as the OCR goes lower. Sentiment bottomed when the OCR topped and has been improving since. Sharon Zollner captures it well:

The economy is now clearly responding to the easing delivered, but the RBNZ will be well aware that the recovery is still new, off a low base, and vulnerable.

Below I show the evolution of business and consumer confidence and the OCR.

My bet is that Hawkesby uses his last meeting to cut 25 and refrain from committing to any promises he cannot keep as Anna Breman takes over December 1. With no meeting until February 2026, I think this will lead to profit taking on NZD shorts. With the correction lower in USDJPY, I like long NZDJPY here (87.62) into the meeting. Takaichi’s policies remain yen-negative and we are far enough away from intervention levels now that I don’t think USDJPY intervention is a concern here.

Stop loss 86.64 and take profit 88.94, risking 96 to make 134.

Canada is in a similar position to New Zealand as we are very late cycle after substantial easing and confidence is returning after the tariff shock. I think this is the zone to sell USDCAD, but I am nervous about corporate month end and so I want to leave a sell order a bit higher (1.4138) in the hope that some random flow gives me a slightly better entry point.

My thinking with CAD is similar to New Zealand in that large shorts have built up in both currencies and the massive monetary easing will soon flow through to the real economy. As we near the end of 2025, large speculators will want to reassess their positions and reduce exposure to possible rebounds in both Canada and New Zealand. The continuing drop in USDCNH makes any short USD trade that much more attractive, as does a possible peace deal between Ukraine and Russia. I am getting bearish USD here for the first time in ages. Just need to make sure the timing is right.

Spot in most currency pairs is double value (trades done both today and tomorrow will settle for value date 28NOV25) and so I would expect corporate USD buying to appear today and tomorrow and so the ideal timing for short USD is just before 11 a.m. tomorrow. I feel like we are going to pivot back to a short USD trade soon as USD longs are substantial, the USD down strategist/consensus vibe died a while ago, and I think the Fed will cut at December FOMC (see table in yesterday’s am/FX).

Exact parameters for the trades always appear in the sidebar. The USDCAD is: Limit order to sell (go short) at 1.4138. Stop loss 1.4231, take profit 1.3926.

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Final Thoughts

I went bullish GOOG in here on November 12 and I think the trade has run its course. As shown yesterday, 326 is max oversold as far as the things I track and you can look at other ways of measuring it—however you slice it, GOOG has gone from nowhere to Buffett-owned and mega-consensus in two weeks. Time to take some P.

I mentioned on the podcast last week that the FOMC should delay the December meeting so they can get more data. That idea is picking up a bit of steam.

Have an 867-degree day.

A day on Venus is longer than a year on Venus.

It rotates so slowly that it takes 243 Earth days to complete a rotation, while it takes only 225 Earth days to orbit the sun. And the sun rises in the west because Venus spins backwards compared to Earth. Weird.

The days are long, and the years are short, as the Venusians say.

Venus does not have a moon, but it has a quasi-satellite called Zoozve.

Check out Zoozve’s crazy orbit here.

good luck ⇅ be nimble