The Aussie will extend this year’s decline and probably fall as low as 65 U.S. cents next year, said Craig Vardy, head of fixed income for Australia in Sydney at BlackRock, which oversees $6.52 trillion. The Reserve Bank of Australia will keep easing as the economy cools and U.S.-China tensions weigh on global growth, he said.
“I’ve no doubt that the RBA wouldn’t have an issue taking the cash rate below 1%,” Vardy said. The central bank wants to see lower unemployment and higher inflation, and is “probably willing to push a little harder to get some traction,” he said.
His other reasons include less Fed cuts than the RBA, trade tensions getting worse not better, an inflation spike owing to tariffs and ongoing falling Australian house prices.
I’ll buy the first two and enough of the second to trigger four rate cuts. Inflation, lol.