Westpac: Australian dollar to keep falling

Via Westpac:

As we began last month’s commentary, we noted that after “a decisive shift down from USD0.78, during April-May, the Australian dollar has flirted with the USD0.75 figure on a number of occasions” but had been unable to sustain a break below. As we went to press, the Australian dollar sat at USD0.7577.

Stepping forward a month, the USD0.75 level has now well and truly given way. Indeed, in the past fortnight, the Australian dollar has spent seven of ten trading days below USD0.74. The driving force behind this leg lower for our currency has been further US dollar strength. From 93.5 as we went to press in June, the US dollar DXY index rose to a high of 95.3 late in the month before partly retracing to 94.6 currently.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.