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Westpac On The Disconnect Between Spot & Fair Value

AUD

A Westpac strategist notes that "AUSD/USD fair value averaged $0.8520 over the last 4 weeks. Since end April, fair value has risen by 6.5% while AUD/USD has fallen by 2.5%. Tells you 3 things:

  1. Fair value is not valid at moment.
  2. Commodity prices/terms of trade also don't matter.
  3. Relative central bank policy is the only game in town."
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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