Cross rates

Traders looking for opportunities on the crosses may want to study the short CAD/long Australian dollar play.

Buskas highlights this opportunity, given it is looking like the Reserve Bank of Australia will deliver a rate hike in the next few months. With Australian rates currently at 6.25 percent, “there already is a 200-basis-point yield spread,” she explains.

Buskas says another factor favoring the Australian dollar vs. the Canadian currency in 2007 is the fact that Australia is more leveraged to the Asian cycle and China continues to expand, while Canada is more leveraged to the U.S.