UBS predicts boost in Australian dollar amidst policy changes in US, China, and Australia

<p>A note from UBS on the Australian dollar, pointing out what to look to help boost it towards 'fair value'.</p><p>UBS says several of its models show that AUD/USD is undervalued around current levels. Says to watch policy developments in three nations:</p><ul><li>US</li><li>China</li><li>Australia</li></ul><p>that will bring AUD/USD higher. </p><p>This makes sense, as we've been discussing here on ForexLive, in order of the above list:</p><ul><li>Fed halting rate hikes and perhaps even cutting in 2024</li><li>Continued stimulus efforts in China to boost the economy and, hopefully, suck in more exports from Australia</li><li>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</li></ul><p>UBS are targeting AUD/USD at 0.70 into 2024. </p>

This article was written by Eamonn Sheridan at www.forexlive.com.