In Australia, at 43.9 (prev. 45.9) the February construction PMI fell. Elsewhere, the RBA released currency valuation notes under a Freedom of Information request.
According to the central bank the AUD was about 2% overvalued in February and could still be considered as too high in order to achieve the desired domestic outcomes. Looking ahead it will be about incoming growth data to drive the currency. The central bank indicated that any tightening of monetary conditions is unwelcomed.
This suggests that a higher AUD from the current levels is likely to trigger renewed verbal intervention.
We stay of the view that the AUD should be sold on rallies, for instance against the NZD and the USD.
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