From The Australian:
Betashares chief economist David Bassenese predicts the RBA will cut the official cash rate from 2.25% to 1.5% by late 2015, and the A$ will fall from $0.7730 to $0.68 by year end.
“Given the Reserve Bank of Australia’s demonstrated concern over economic growth, we now expect the Bank to cut the official cash rate to 1.5% by late 2015,” Mr Bassenese says.
“The next interest rate cut seems likely next month. Together with our view that the United States Federal Reserve will begin raising interest rates by mid-2015 – and ongoing likely weakness in commodity prices – we now see the $A falling to US68c by year-end.”
He says the key to further interest rate cuts is the expectation that the RBA’s hoped for rebound in non-mining investment will continue to disappoint.
At last someone wakes up. This is very possible. In fact, if APRA does its job we’ll go even lower.
Any short term play on this is better directed through liquid shares or playing the Aussie dollar than it is in property, given that when the reversal comes it will be savage and an easy exit is vital for risk management.
In fact, my advice is to get moving on deleveraging as it happens. We’re entering the end game of a thirty year credit bubble.