While our dreadful leadership is busy talking up houses and fairies this morning at a Bloomie conference, Goldman has made more sense at the same gig, from Forexlive
- Philip Moffitt, head of fixed income for the Asia-Pacific region at Goldman Sachs Asset Management, speaking at the Bloomberg Summit in Sydney (earlier headline here). More now:
- Sees the Federal Reserve tightening early next year and says the U.S. economy is in great shape
- Sees Australian dollar about 85 U.S. cents in 6 months because “the dollar’s going to be strong in the early stage of this tightening cycle”Additional RBA rate cut still possible next year if currency remains around 85 cent level
- There has been strong portfolio demand for Australian dollar assetsSays there’s more complexity to FX levels than just relative moves in rates
- The process of opening up China’s financial markets has accelerated and the opportunity for foreign investors to invest directly there is picking up
- The longer-term idea of Aussie as a proxy for China “is definitely going to wane as a direct driver of the currency”
Correct on all fronts. Rates will still have to go lower. The dollar really needs to be at 70 cents before we can “recover”.
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