BlackRock: Australian dollar to 0.65 cents

Via Bloomie:

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.

Comments

  1. proofreadersMEMBER

    “The central bank wants to see lower unemployment and higher inflation, …”

    A convenient mission impossible, but gives them something to do?

    • Huh? Lower unemployment and higher inflation is very easy to achieve – just print like mad and employ millions of unskilled workers to build a great wall around the Great Victoria desert.

    • The excuse of cutting IRs to Lower U.E. Is a bs smokescreen. Their only aim is to reduce the pain on over leveraged households, but to admit that would be to admit they massively stuffed up. The idea rate cuts is going to reduce UE and result in pushing wages up is an absolute joke.

      • DominicMEMBER

        Correct a thousand times.

        The primary objective of fiscal and monetary policy is to incentivise consumers to borrow, spend, and pull consumption forward, while simultaneously easing the burden on all those who are already borrowed to the eyeballs.

        With the ‘zero bound’ within touching distance I sense this gig may be about up.

      • Increase inflation? Is also laughable. Given that there is heaps of inflation, but the way they measure it seems to negate looking at assets. I mean it’s not like people have to buy homes to live in. So inflation must be low. 😀

      • john6007MEMBER

        @ Dennis “Their only aim……..”
        My thoughts exactly and good to see other share this view.

    • DominicMEMBER

      Easiest job in the world right? None of their objectives ever come to fruition, every one of their forecasts is wrong but they’re still all worth a million bucks a year of taxpayer of sweat — and dimwitted journos hang on their every word.

      The human race is doomed.