Westpac's G10 FX model "continues to build....>

FOREX: Westpac's G10 FX model "continues to build a long exposure to AUD,

lifting it to 8% of the portfolio. The AU-US 10yr spread has stabilised at -60bp

to -70bp after pushing out relentlessly against AUD through 2019Q1 and last week

saw a crop of better than expected data including consumer sentiment, retail

sales and building approvals, lifting our AUD growth signal. The model is short

USD for another week, that position looking increasingly entrenched in its

eleventh consecutive week. The model is negative USD even though the USD enjoys

the strongest growth and yield signals across the G10. Valuation is increasingly

the bigger USD negative, both on a long term PPP basis (after years of USD

strength) as well as on a short term fair value basis, the USD resilient in the

face of a slight loss of yield support, higher commodity prices and low

volatility."