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NAB Note AUD/USD Is Well Below Fair Value Estimate, Even After Mark Lower

AUD

NAB note that their “AUD/USD model estimate endured a sharp decline during September, with all three factors in our model contributing to its decline.”

  • “The model estimate fell by almost six cents to $0.6840 in September, with the increase in market risk aversion the largest detractor, subtracting just under 3 cents from the model estimate. AU/U.S. rate differentials deducted over 2 cents, while commodities took around 0.8c off.”
  • “Notwithstanding the sharp decline during the month, our fair value model is still suggesting AUD/USD is extremely undervalued. AUD/USD ended the month at $0.64, 4.4 cents below our model estimate.”
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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