Which investment bank says to buy the Australian dollar … and against what? via ForexLive

JP Morgan, that's who!

What ya think of this?

We recommend going long AUD/NZD
The underperformance of AUD is notable since it is one of the three G10 countries where interest rates actually increased relative to the US
The weakening in AUD likely reflects the rich valuations from a couple of weeks ago—at that time, it was screening as one of the richest currencies on our short-term fair value models, particularly vs. NZD
However the recent weakening has brought AUD/NZD to near fair value, presenting a better entry level to go long
Our strategy for most of the year was to be bearish on AUD/NZD given the divergence in central bank policies. However, going forward we think that AUD is likely to be the outperformer given the divergence in housing and relative commodity prices
We now expect the cross to trade in 1.09-1.15 range, likely with more upside in 2015. Moreover, data momentum has been quite strong in Australia … something that the currency has ignored so far, and weak in New Zealand
Specifically, we recommend buying a 2- month 1.1150 AUD/NZD call (35 delta) vs. selling a 1.12 call, RKI 1.14. This trade gives maximum leverage of 8.5:1 if the RKI is not triggered and leverage of 1.75:1 if the RKI is triggered.

Thoughts welcome!