Just how low will the Australian dollar go?

Thursday, 13 November 2014

From the AFR:

The Australian dollar will finish the year at US85¢ before falling prey to a strengthening US economy and drop to US76¢ by the end of 2015 and the Reserve Bank of Australia will hold tight on rates until the US Federal Reserve makes the first move, likely in the first half of 2016.

That’s the view of Morgan Stanley’s Asian foreign currency and rates strategy head, Geoffrey Kendrick. It sounds simple enough; Australia’s currency will weaken with commodity prices, while the United States continues its resurgence.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.