Reality is challenging but sentiment shouldn’t take precedence
G10 investors have been forced into crash courses on copper and ‘copper financing’ trades this week as the selloff in the metal appears to be leading every other asset class. Despite perceptions, commodity currency performance has been mixed and losses have been limited. Idiosyncratic factors have played a role, such as the RBNZ’s assertiveness today to the NZD’s benefit. In addition, there is justification in the belief that sentiment and positioning have supplanted fundamentals, warranting a tactical correction.
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