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CBA: AUD/USD Has Room To Catch Up With Commodities Before Easing In '22

AUD

CBA note that they "have generally been more optimistic about AUD/USD than the consensus of forecasters for most of the past six months. We still expect AUD/USD to increase further because it is comfortably below our estimated range of fair value. Commodity prices and interest rate differentials are the fundamentals that drive AUD/USD over the medium term. We estimate the fair value range is $0.78 to $0.89, centred on $0.83. AUD/USD has diverged from its improving fundamentals. The divergence reflects in part U.S. economic outperformance amid delayed vaccination in Europe, Japan and Australia. Nevertheless, we consider the gathering momentum in the world economy is a positive omen for AUD/USD because it is linked to global growth expectations and commodity prices… The upshot is AUD/USD has room to catch up with high commodity prices before easing in 2022."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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