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.
![audusd chart ubs target 70 cents US 01 December 2023](https://images.forexlive.com/images/audusd%20chart%20ubs%20target%2070%20cents%20US%2001%20December%202023_id_5fc5c2d3-fd53-4e9a-983c-ded06888e262_size900.jpg)