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AUD should be trading lower - ANZ

FXStreet (Barcelona) - The ANZ Research Team targets $0.80 for the AUD in the long term as they view AUD to be overvalued currently.

Key Quotes

“The AUD is continuing to consolidate near multi-year lows, but the deterioration does not look out of place relative to weak fundamentals.”

“Purchasing Power Parity (PPP) models are suggesting the AUD should be closer to USD0.70. This looks too bearish as it does not wholly account for the structural uplift in the AUD from the shift in global growth towards Asia. But it does set a base for understanding where the distribution of risks lies, should the cyclical slowing in China worsen.”

“The fact that these long term anchors remain at significantly lower levels, and that ANZ Research does not anticipate marked improvement in key commodity markets in 2015, reinforces our view that the AUD should be trading at lower levels.”

“We revised down our 2015 year-end AUD target from USD0.85 to USD0.82 and December 2016 target to USD0.80.”

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