Tactical Trading: Continue with the short A$ trade?

Thomas Schoenmaker

Wentworth Securities

On Tuesday, I listened to the Treasurer defend the Govts 2.5% GDP Growth forecast, and beyond that, he firmly believes growth will accelerate to 3.0% then 3.5% in the forward estimates. And a day later, the RBA released GDP figures which showed that the Australian economy would have all but shrunk, without a +2.2% contribution from Government spending in the quarter. Today, the Treasurer proclaimed there is no chance that Australia is heading toward recession (we wrote a piece on these chances in June (VIEW LINK) ). GDP growth is heading toward 2.0%, not 3%. We have been invested in the "short A$ trade" since April 2014, and our conviction to it is rising. Several commentators, both on Livewire and in the press, are making the case for a lower A$. We explain our views and why a tactical allocation to US$ via ETFs can fit nicely in the current uncertain environment. (VIEW LINK)

Thomas Schoenmaker
Director and Head of Wealth Management
Wentworth Securities

Tom is a Founder and Head of Wealth Management. For the past 10 years, he has been running the Wentworth Model Portfolios, focusing on macroeconomics and tactical equity positioning. These portfolios were initially created as a solution for "core...

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