Deutsche Bank: AUD has a chance
Analysts at Deutsche Bank are neutral on AUD/USD until the year-end, but they think that Australian dollar may outperform versus lower-yielding currencies like euro and Japanese yen.
The specialists point that there are 2 contradictory forces which are having an impact on Aussie. One is carry trade (AUD-positive) and another is the terms of trade fair value (AUD-negative). Australian dollar is overvalued according to terms of trade. However, Deutsche Bank points out that there were periods when AUD was over- or undervalued for about 4 years each time. For now the real trade-weighted rate of AUD has been over-shooting the terms of trade for only 2 years, so the market may ignore higher Aussie for a bit longer.