23 Jun 2014
AUD remains overvalued – Westpac
FXStreet (Edinburgh) - Analysts at Westpac Global Strategy Group, still consider the Aussie dollar as overvalued.
Key Quotes
“The AUD still looks overvalued to us, even with some stability starting to emerge in terms of iron ore prices”.
“Our simple fair value estimate pegs the currency below 0.8800¢, which represents the biggest divergence from spot since May 2013”.
“We suspect the RBA is not too far away from raising its rhetoric/jaw boning around the currency strength (indeed we got some hints of in last week's RBA minutes). The RBA minutes also highlighted some uncertainty regarding the non-mining outlook and whether strength in this sector would be enough to offset the decline in mining investment”.
Key Quotes
“The AUD still looks overvalued to us, even with some stability starting to emerge in terms of iron ore prices”.
“Our simple fair value estimate pegs the currency below 0.8800¢, which represents the biggest divergence from spot since May 2013”.
“We suspect the RBA is not too far away from raising its rhetoric/jaw boning around the currency strength (indeed we got some hints of in last week's RBA minutes). The RBA minutes also highlighted some uncertainty regarding the non-mining outlook and whether strength in this sector would be enough to offset the decline in mining investment”.