From the yesterday men at the AFR:
BK Asset Management’s managing director of foreign exchange strategy Kathy Lien said: “Investors fear that the Greek crisis, sell-off of Chinese equities and decline in commodity prices could lead to a more dramatic slowdown in Australia, New Zealand and Canada’s economy.”
Capital Economics Australian economist Paul Dales said: “Looking ahead, both our forecasts for the iron ore price and Australian interest rates are consistent with the Australian dollar weakening further against the US dollar.
…”Meanwhile, if we are right in thinking that the RBA will cut rates to 1.5 per cent [from 2 per cent now] and leave them there while the US Fed steps up the pace of [interest rate increases] next year, an Australian dollar rate of around US65¢ is possible.”
More likely is no Fed hikes and Australian rates at 1% with the dollar at 60 cents.
