"We forecast that the AUD will peak at USD 0.78 in Q3 2016. While our forecasts show a gradual depreciation from there, we expect that AUD will trade with some volatility in a USD0.70- 0.78 range before breaking lower in the latter half of 2017.

Given the uncertain nature of the timing of the depreciation, the current low level of volatility, and the skew present in the risk reversal, we recommend using options to capture this range. We recommend buying a 6 month AUD/USD0.74/0.71 put spread and selling a 6 month AUD/USD0.80 call at an indicative rate of AUD 24 pips".

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