It seems now that the Aussie dollar has begun to fall, the cries and forecasts for further falls are coming thick and fast.
But not from the National Australia Bank’s currency strategy team who yesterday said there was “some evidence the currency has modestly overshot to the downside”.
The NAB says:
in our short term fair value model that encompasses industrial metals, gold, rates spreads and the VIX, present value is currently pegged above 91 cents (chart 3). Also, latest positioning data c/o the IMM suggests that the previous overhang of long AUD positioning has now largely been eliminated.
They note that the US dollar strength could persist but say they are “just cautious about simply extrapolating the trend of the past few weeks to a much lower AUD in the near term”.
“That said, we are happy to restate our long-standing forecasts for AUDUSD falling to 82 cents by late 2015 and 80 by early 2016.”
There has been a lot of selling and with sentiment so bearish, perhaps it is time for a bounce.
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