© 1982-2023 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

MNI BRIEF: Yellen Says Americans' Deposits Are Safe

MNI BRIEF: Italy ESM Ratification Framed In EU’s Fiscal Debate

MNI BRIEF: US CRE Poses Limited Threat to Stability - OFR

Coming Up In The Asia-Pac Session On Friday

EZ/UK Bond Supply Calendar: UK Long APF Sales on Monday

MNI: U.S. TREASURY GENERAL ACCOUNT -$24.7B TO $199.9B MARCH 22

MNI: Freeland-Banks Well Capitalized, Budget To Focus Stimulus

MNI BRIEF: Joint European Funds Best Response To IRA-Gentiloni

MNI BRIEF: Fed, Treasury, FDIC-Big Banks Back First Republic

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
Trending Top 5
Market News Topics

CBA: Some Convergence In Spot & Fair Value, See Further Upside

AUD
BulletMarketsForeign Exchange NewsHomepage

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.”
153 words

To read the full story

Why Subscribe to

MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

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.”