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CBA Push AUD/USD Fair Value Estimate Higher

AUSSIE

CBA note that their "new equation estimates the fair value range of AUD/USD is $0.71 to $0.82 centred on $0.77. Our new $0.77 estimate for fair value is about $0.07 higher than our previous estimate published in May. Part of the reason for the new estimate higher of fair value is the recent increase in Australian commodity prices. At near $0.72, the current value of AUD/USD is at the lower end of the fair value range. Our current above‑consensus forecasts, published in early June here and over page, predict AUD/USD will end 2020 at $0.72 and lift to $0.77 before the end of 2021. Our current forecasts are consistent with a gradual lift in AUD/USD back up to the centre of the estimate fair value range. Absent further external shocks, our equation suggests the risk is AUD/USD lifts to the centre of its fair value range sooner than our current forecasts."

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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