Fair value of currencies

In the same issue of the Economist magazine I cited previously, there is an article about the valuation of currencies based on 13 quantitative models that Morgan Stanley developed. They found that the most overvalued currency (against the US dollar) is the New Zealand dollar, while the most undervalued currency is the Japanese Yen.

What about the Chinese Yuan that arouses much hoopla in Congress? The models found it to be almost exactly fairly valued.