Bloomberg News

Adrian Lee Says He May Buy Overvalued Aussie on a Fall to $1.05

February 15, 2012

Feb. 9 (Bloomberg) -- Australia’s dollar is overvalued and may be attractive should it weaken more than 2.5 percent to $1.05, according to Adrian Lee, chief investment officer at currency portfolio manager Adrian Lee & Partners.

The currency touched a six-month high yesterday versus the U.S. dollar after the nation’s Reserve Bank unexpectedly left interest rates unchanged at 4.25 percent on Feb. 7 and signaled optimism that global growth will strengthen. The currency has gained 9.9 percent over the past six months against its major counterparts, the best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.

“Technically the Australian dollar is strong now, but quite overvalued,” London-based Lee, whose fund manages more than $8.5 billion, said in an interview yesterday. “We wouldn’t be buying it at $1.08.”

The Aussie climbed as high as $1.0845 yesterday, the most since Aug. 2. It fetched $1.0801 as of 9:12 a.m. in Sydney.

RBA Governor Glenn Stevens cited “quite robust” Chinese growth and a “moderate expansion” in the U.S. as reasons for holding rates this month, even after Australia’s 2011 jobs market was the weakest in 19 years.

Manufacturing in China, Australia’s largest trading partner, expanded for a second month in January while U.S. unemployment slid to a three-year low, government reports last week showed. Commodities account for more than half of Australia’s exports.

“There is big demand for commodities and emerging-market growth should continue,” Lee said, saying he expected the so- called Aussie to stay strong. “$1.05 is a level we may buy at again.”

--Editors: Garfield Reynolds, Naoto Hosoda

To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net


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