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NAB: AUD/USD & Model Estimate Diverge After Brief Meeting

AUD

NAB note that “halfway through April the AUD/USD and our AUD/USD model estimate matched each other for about a week, but then later in the month the abrupt decline in spot was not matched by a similar decline in the model estimate. The AUD/USD ended April below 71c while the model estimate held above 75c. In April the model estimate fell by just over 1c with the model’s risk factor explaining the bulk of the decline. AU/U.S. rate spreads were a small detraction while (mixed) commodity prices were a small net positive.”

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NAB note that “halfway through April the AUD/USD and our AUD/USD model estimate matched each other for about a week, but then later in the month the abrupt decline in spot was not matched by a similar decline in the model estimate. The AUD/USD ended April below 71c while the model estimate held above 75c. In April the model estimate fell by just over 1c with the model’s risk factor explaining the bulk of the decline. AU/U.S. rate spreads were a small detraction while (mixed) commodity prices were a small net positive.”