AUD: Over-valuation at the highest level in nine weeks – ANZ

Research Team at ANZ, notes that the over-valuation of the AUD is at the highest level in nine weeks.

Key Quotes

“While the AUD’s rise has been directionally aligned to the model, the AUD continues to move in an exaggerated fashion. With momentum increasingly driving the AUD crosses – rather than a fundamental shift in perception of the AUD - this leaves the AUD vulnerable to any negative surprises.

Otherwise, interest rate dynamics remain a key driver (particularly the US front end), and the commodity complex also continues to be relevant. Here, iron ore looks increasingly stretched, sitting just below US60/tonne. Should the iron ore price turn lower, this could help to drive renewed weakness in the AUD.”