RBC Says Krone, Aussie, Canadian Dollars Are Recovery ‘Plays’

By Daniel Tilles

May 15 (Bloomberg) -- The Norwegian krone and the Australian and Canadian dollars may gain as improved economic sentiment stokes speculation central banks will raise interest rates, according to RBC Capital Markets.

“It is not our central expectation that any Group of 10 central bank will move to tighten policy in 2009,” Adam Cole, head of global currency strategy in London at RBC, wrote in a report dated yesterday. “But if the notion of an improving global economy continues to gain traction, the clear winners are Australian dollar, krone and to a lesser degree Canadian dollar, and we would look to rapidly add exposure to these currencies in advance of markets moving to discount rate hikes.”

To contact the reporter on this story: Daniel Tilles in London at dtilles@bloomberg.net

Last Updated: May 15, 2009 03:30 EDT