AUD/USD vol is too expensive: Sell high strikes

Beyond the long-term picture of AUD and CAD vol, AUD/USD vol is currently getting tooexpensive. It includes an excessive volatility risk premium, unlike USD/CAD vol,which is trading at a fair level.|
 
Societe Generale notes the following on Friday:

• The FX rate has been range-bound around 0.78 since the end of January, its realised volatility is depressed, and the main risk events are over (RBA meeting, GDP and trade data). 
  
  
• This premium could be partly justified by the likelihood of rate cuts at the next meetings, but the risk is heavily asymmetric since the case for more AUD/USD volatility would only materialize if the currency were to head towards new lows: Selling topside volatility on these levels is attractive.