The AUD is in super bid mode, bullish plays from hedge funds, investments banks, banks, Sovereign funds, Japanese housewives. With a 0.99 cent option call knock out and the drive to parity which appears unrelenting, the classic and unmistakable signs that a bubble has formed around the AUD. Last time the AUD rallied in such a way as it is now, it collapsed from 0.9849 1st June 2008 to 0.60 1st Oct 2008 losing over 60% of value.
Fair Value models on the AUD got thrown out the window in the last 6mths, I heard ranges from 0.85 to 0.90 were in fair value range; that anything above 0.90 is overvalued. Refer Morgan Stanley chart:
the chart that AUD bears (the handful) glance at:
Export service industries, tourism, manufacturing, yes even the beloved miners will start kicking up a fuss in days rather than months re: high AUD
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