Flash: AUD/USD faces 1.2%-2.9% losses on Aus funds reallocations -ANZ

FXstreet.com (Barcelona) - Andrew Salter, FX Strategist at ANZ, sent out a research note earlier in Asia about Australia's pensions managed by superannuation (“super”) funds, in which he estimates the extent of AUD selling if super funds increase their allocations to foreign asset markets.

Key quotes

"With the economic outlook in Australian asset market changing relative the US in particular, we suspect reallocations to foreign markets could be in the order of AUD3.1bn to AUD7.2bn."

"While not enough to impart a material correction in the exchange rate, it is enough to see it underperform for some time. Rough estimates suggest this implies a depreciation of around 1.2-2.9% in excess of the exchange rate’s prevailing long term fair value."