CBA note that “AUD/USD has risen by almost $0.09 since its most recent low in mid‑October 2022. The lift in the AUD/USD has been driven by the reopening of the Chinese economy and a more optimistic view of the global economy.”

• “Despite the large rise in recent months AUD/USD is still trading below our estimate of fair value, which currently centres on $0.79 with a range of $0.74‑0.85.”
• “However there has been some convergence between AUD/USD and our fair value estimate. Our equation shows that fair value for the AUD/USD eased over H222, with falling commodity prices and a negative interest rates differential between Australia and the U.S. reducing fair value. Working the other way, a lift in global risk appetite (as measured by a lower VIX index) has supported fair value for AUD/USD.”
• “We expect that the AUD/USD can trend higher over the coming weeks as the Chinese economy continues its recovery.”