Long-term fair value measures are suggesting that the USD is currently overvalued, particularly as productivity has declined in the US faster than in other countries.
We find that GBP is weak on many measures, with PPP suggesting GBPUSD is particularly undervalued.
CHF is overvalued on most measures but this has been the case for decades.
We find that in a carry-driven environment, real yields are still supportive for the NZD.
These are all, of course, just indications and it can often take years before a currency returns towards its estimated fair value.
Copyright © 2016 Morgan Stanley, eFXnewsOriginal Article
