# Australian Dollar is 10% Undervalued says CBA, but Closing the Gap Will be a Drawn Out Affair

> Commonwealth Bank of Australia analysis says the Australian dollar is about 10% undervalued against its estimated fair value of 0.79 USD, while it trades near 0.70. CBA forecasts only a fraction of that gap will close over the next 18 months, citing a narrowed current account deficit, a five-year high in the RBA commodity price index, and a low interest rate spread.

- Date: 2019-06-26 · published 2019-06-26T12:00:00.000Z
- Category: macro · region Australia · magnitude low
- Page: https://feedsoft.ai/events/58845-australian-dollar-is-10-undervalued-says-cba-but-closing-the-gap-will-be-a
- Commodities: [Australian Dollar (USD per AUD)](https://feedsoft.ai/c/AUDUSD.md)

## Why it matters

A currency view like this shapes expectations for Australian export competitiveness and commodity pricing in USD terms. The forecast implies only a gradual AUD recovery, so the near-term effect on feed-grade commodity prices is limited.

## Read by commodity

- AUDUSD: bullish ▲

## Sources

- poundsterlinglive.com: https://www.poundsterlinglive.com/aud/11588-the-australian-dollar-is-10-undervalued-says-cba-recovery-begins-in-december

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.