Westpac's fair value for AUD/USD is around 0.77
Westpac's chief economist Evans with commentary on the Reserve Bank of Australia's AUD forecasts.
The background to this is the RBA moved its assumed AUD level in today's latest Statement on Monetary Policy from 0.64 in May to 0.72
WPAC (in brief from a longer note):
- the Statement on Monetary Policy noted that the AUD is "broadly consistent with its fundamental determinants"
- It seems that the Bank's "pain threshold " for the AUD is some way off.That threshold is significantly affected by "fundamentals".
- Our own fair value model for AUD currently stands at around USD 0.77 allowing ample scope for further appreciation without unnerving the RBA.
Bolding is mine