NAB: AUD/USD’s Move Higher In May Justified By Key Inputs

{AU} AUD: NAB: AUD/USD’s Move Higher In May Justified By Key Inputs
NAB note that “the move up in AUD/USD during May was more than justified from a model perspective. Indeed, our fair value model estimate rose by a little bit more than spot (1.5c vs 1.2c) with all the main model factors contributing positively. Relative AU-US spreads added just over half a cent to the model estimate during May. The commodities contribution was around 0.4c with oil and metals positive influences, partially offset by a decline in gold. The improvement in risk sentiment was broad based, aided by a decline in volatility and narrowing of EM sovereign spreads.” Note that their model estimate for short-term AUD/USD fair value now sits at $0.7580.