PIMCO shorts the Aussie dollar

Fixed income investment management company, Pacific Investment Management Co. (PIMCO), has told investors that it is short the Australian dollar, citing falling commodity prices and interest rates. From Bloomberg:

“Our highest conviction views are in the currency markets, and we remain short the yen and the Australian dollar against a long U.S. dollar position”…

According to FX Live, some of the factors underpinning PIMCO’s view are:

  • Slowing growth in China.
  • The fragile domestic rebalance away from mining-led growth.
  • Declining terms of trade from lower bulk commodity prices.
  • Sub-trend growth in domestic demand and weak national income growth.
  • Falling Australian interest rates.

They are correct on all counts, in my view.


  1. Posted yesterday but worth repeating
    Our near future…Goldman wrote this for Brazil but sums up where we are headed
    (via Zero hedge)

    ” Business and consumer confidence remains very depressed given the anticipation of policy tightening, rising inflation, rising taxes, rising interest rates, significant increases in utility and transportation tariffs, deteriorating labor market conditions, and more demanding credit conditions. This poses major headwinds for private consumption and overall activity in the coming months and indirectly contributes to erode overall governability conditions.”

  2. Over the longer-term maybe. Just as the Aussie starts its rise back to USD 0.86 or thereabouts before its inexorable fall to the mid-sixties They wouldn’t happen to be setting a sheeple-trap by any chance?