A note from UBS on the Australian dollar, pointing out what to look to help boost it towards ‘fair value’.
UBS says several of its models show that AUD/USD is undervalued around current levels. Says to watch policy developments in three nations:
- US
- China
- Australia
that will bring AUD/USD higher.
This makes sense, as we’ve been discussing here on ForexLive, in order of the above list:
- Fed halting rate hikes and perhaps even cutting in 2024
- Continued stimulus efforts in China to boost the economy and, hopefully, suck in more exports from Australia
- The potential for further rate hikes in Australia given a hawkish Reserve Bank of Australia Governor Bullock and inflation stick above the bank’s 2 – 3 % target band
UBS are targeting AUD/USD at 0.70 into 2024.
This article was written by Eamonn Sheridan at www.forexlive.com. Source