Blackrock sees 80 cent dollar

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From Bloomie:

BlackRock Inc., the world’s biggest fund manager, said Australia’s dollar may drop as low as 80 U.S.cents in the coming nine months after bets against the currency helped give one of its bond funds the nation’s best returns. The strategy profited as the Reserve Bank of Australia cut rates while U.S. yields rose, said Stephen Miller, a managing director in Sydney at BlackRock, which oversees $3.9 trillion globally. Its Australian bond fund returned 3.4 percent in the first half, beating 80 fixed-income funds Morningstar Inc. tracks. The Aussie’s 11 percent drop this year may spur the RBA to keep borrowing costs unchanged next month, Miller said.

“We prefer to be sellers of the Aussie dollar still,” he said yesterday in an interview. “Let’s say that China’s a soft landing, let’s say the U.S. recovers in a manner that I expect, I would have thought that you’re probably looking at 80 cents at some stage in the next six to nine months.”
The extra yield Aussie 10-year notes offer over Treasuries shrank 34 basis points this year as a slowdown in Chinese growth weighs on Australia’s prospects, while Federal Reserve policy makers say the U.S. economy is strengthening. BlackRock’s Aussie forecast is more bearish than the median of 49 estimates compiled by Bloomberg for the currency to trade at 89 cents by March 2014.

…“The economy’s still growing a bit below trend,” Miller said. “We know that the RBA and the authorities more broadly are hopeful that non-mining sectors of the economy can recover.

That remains more of a hope than something you could hang you hat on.”

That seems fair enough by my bet is we much lower still over the next few years.

Comments

  1. GunnamattaMEMBER

    ‘That remains more of a hope than something you could hang you hat on’

    I think your call a couple of months back about 0.75 being about square and it needing to go well below that for an extended period (so everyone gets the idea) is about right on the money.

    My suspicion is that the only thing that has held these guys back from tipping lower is their nominated timeframe (6-9 months).

  2. Federal Reserve policy makers say the U.S. economy is strengthening.

    Pigs might fly…

  3. ok guru’s… i have $AUD 230 000 cash… its my life’s savings.
    i’m not educated, nor am i particularly financially savvy.
    i have no real assets or anything tying me down so when i gave up on buying a house in my home town (perth) i quit my job and found that i can live off the interest from 2 goal saver accounts with the commonwealth bank (term deposits went under %4.5 per 3 months so i switched)
    am currently in asia pursuing a girl…
    advice?
    should i cash out for USD now?
    i am in HK btw… and HKD is tied to USD… i don’t know how long i’ll stay… atm i don’t see myself going back ever

    • CASTOR I doubt anyone here wants to answer your question. We have our own opinions about what SHOULD happen vs what WILL happen but most of us have been around long enough to know anything COULD happen.

      You might get a theoretical discussion going on such a question but we wouldn’t want to think anyone was acting specifically on anything we might say.

      I guess we see MB as a kind of think tank more than an advice centre. So you read all you can and make the best decision you can and live with it.

    • @castor.

      am currently in asia pursuing a girl…
      advice?

      Yeah sure. Don’t chase girls, they’re the biggest wealth destroyer known. hahaha

      • I was just joking castor. Chase her until you catch her buddy. That’s one of the things that makes life worth everything it is.

        As for the money, the best investment you can make IMO is doing what you’re doing. Not owning Australian housing.

        Living off the interest, your money is going backwards by the rate of inflation (presently about 2.5%). Your options are limited while you’re not working and rely on the income from that money.

    • migtronixMEMBER

      I would recommend hedging some of that with gold & silver mix, say 2-5%. HK is a good place to get it.
      Re:converting to USD, look into USD producing income streams like Certificates of Deposit or coupon binds.
      My only real advice is do some research, sounds like you have the time on your hands and the interest. When you’re boned up enough and have an income producing streams you might even look into day trading. It’s intellectually interesting and could keep you independently wealthy and mobile for a while. Bon chance

      • thanks man… i’ll check those things out… i’ve downloaded a forex tutorial but its abit over my head atm but i’ll persevere with the paper trading they recommend and see… fingers crossed

      • I was just joking castor. Chase her until you catch her buddy. That’s one of the things that makes life worth everything it is.

        As for the money, the best investment you can make IMO is doing what you’re doing. Not owning Australian housing.

        Living off the interest, your money is going backwards by the rate of inflation (presently about 2.5%). Your options are limited while you’re not working and rely on the income from that money.

    • GunnamattaMEMBER

      Chase the bird mate. Dont worry about the money – no matter what it is you are doing it will all be basically meaningless if you pull the bird.

      As someone who has made a pointed judgement to not own Australian housing and to make sure every liquid skerrick of currency I have is in something other than AUD I reckon you are already in some sort of shape.

      Be careful with Forex trading – punters can lose money very quickly. Pay close attention to the Chris Becker and Greg McKenna posts here (but bear in mind they are not financial advice). And if you can get some sort of work in HK to offset the costs of you living there (and not eat into your stash) then so much the better.

      But good luck with the bird….

      • thanks for the advice and encouragement rich and gunna… and the major takeaway upside is, things are going good with the girl.
        everything else… that’s just going to take time i guess.
        i’m not really trying to live off interest long term… and i know i’m going backwards financially but at least my life feels like its moving forward.
        it did not feel that way shopping for a property back home.
        i’m a pretty simple person and had house prices been even moderately reasonable then thats what my ‘financial strategy’ would have been… buy a house, live in it, pay it off.
        but they’re not… so this is the beginning of one guys search of, ‘well, what else then?’
        so i want to thank you guys and others in this forum that may read this… many of you make alot of sense about certain things (disturbingly contrary to what is portrayed in the australian media)
        i don’t understand every concept debated, but this public group think is a helpful pointer to a way of understanding some of it… and some of you are pretty funny

      • Castor, so good you’re part of the MB community. I don’t think anyone here privileges themselves over anyone else. I say that as discussion here is pretty much quality old SKoool debate. Which has to be good. I too wish you luck with your travels and have some Yum Cha for me. 🙂

  4. If you can live in HK off bank interest from $230,000 you should be giving us all financial advice