From Bloomie:
HSBC Holdings Plc, the most accurate at predicting the Aussie over the past four quarters in data compiled by Bloomberg, expects it to fall to 90 U.S. cents by Dec. 31 and 86 cents by the end of 2014 from 94.24 at 1:32 p.m. in Sydney. The currency climbed last quarter by the most since 2011, prompting economists surveyed by Bloomberg to raise their end-2014 forecast to 89 cents from 88 as recently as Sept. 18.
“The markets got a bit more excited about Aussie recently, but we don’t share that enthusiasm,” David Bloom, the London- based global head of currency strategy at HSBC, said by phone on Oct. 4. “The Aussie will continue to fall slowly but surely as the resurgent U.S. dollar sweeps all in its wake, driven by an eventual tapering by the Federal Reserve.”
HSBC sees the Aussie sliding next year to levels unseen since July 2010 as the Fed starts scaling back bond purchases that have buoyed higher-yielding assets. In Australia, the two- year yield has dropped seven basis points in the past six months to 2.72 percent, the biggest slide among 21 developed bond markets outside Israel and Spain tracked by Bloomberg, as the Reserve Bank warned of the peak in a mining investment boom and Treasury predicted decade-high unemployment.
Emirates NBD and Canadian Imperial Bank of Commerce, the second and third-best forecasters, see a deeper decline to 85 cents during 2014. Investec Securities and Bank of America Merrill Lynch, who took the No. 4 and No. 5 spots, are less bearish, picking 88 by Dec. 31, 2014.
…The impact of a boom in Australia’s resources sector, which helped drive 2.7 percent growth in 2008 as the global financial crisis unfolded, is now fading, according to Patrick Bennett, Hong Kong-based strategist at CIBC.
…“The pace of expansion in Australia for three or four years from 2008 is just not going to be repeated,” Bennett said by phone on Oct. 2. “There has to be a wholesale reassessment of what the growth impulse is going to be.”
Correct all around I’d say. But it’s too little, too late and I’d be picking an undershoot by 2014 year end as well as further falls in 2015 as the capex cliff continues its giddy decline.
