AUD/USD moves towards fair value
The Aussie's resurgence is partly a result of the downward correction in the US dollar, which we believe cleared the way for AUD/USD to head towards its fair value (see figure 1).
AUD/USD has also been a beneficiary of the ubiquitous carry trade, but unlike NZD/USD, we don't see the carry trade driving AUD/USD to extreme overvaluation. According to our modelling, based on Australia's export commodity prices, interest rate differentials to the US and measures of investor risk aversion, we believe
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