Australian dollar may hit US65c

3 March, 2017

The Australian dollar’s run as one of the best performing currencies this year may be coming to an end on the back of weaker commodity prices and rate cut expectations over the past week.

At 7.29pm (GMT) the Aussie dollar was trading at US75.59c down from US76.75c in yesterday’s trading.

Iron ore prices are off almost 4 percent since reaching a 24-month high last week, and coupled together with disappointing export and trade balance figures release earlier today, the writing may be on the wall for the Australian dollar.

The disappointing export figures are mainly attributed to China, Australia’s biggest trading partner with the biggest culprit being a reduced demand for Iron ore.

Any slowdown in China would be disastrous for the Australian economy.

Ever since last week analysts and government officials alike such as Reserve Bank of Australia Governor Philip Lowe ,who noted the investors shouldn’t get used to Australia’s biggest export hanging around the $90 mark,

“I do think that commodity prices are going to come back off again,” Lowe told a parliamentary panel last Friday.

“We shouldn’t start to think that the iron ore price is going to stay around $90.” He added.

Another factor hurting the Australian dollar at the moment against it’s American counterpart is expectations that the RBA will have to lower interest rates too boost inflation, which will bring the benchmark interest rate on par or even lower than in the US,

Paul Dales, chief Australia and New Zealand economist for Capital Economics predicts that interest rates in Australia as well as the Aussie dollar are headed much lower,

“The RBA won’t raise rates in 2017 or likely in 2018, and I wouldn’t be putting much money on a hike in 2019 either. In fact, with the housing market slowing, the labour market weakening and inflation staying below target it’s possible that there will be cuts this year to 1 percent” he said.

“We also think the Australian dollar could fall from US77c today to around US65c because of RBA rate cuts, a stronger US dollar thanks to Trump’s expansionary plans for the world’s biggest economy and falling commodity prices.” he added.


Source link  
Oil to remain flat

The oil price is set to remain stagnant over the next few years according to some analysts with the outside possibility that the price could tumble if Opec members fail to cooperate...

Mini gold rally won't last

After hitting a low of $1,260 3 days ago, the gold price has rallied nearly $30 to be trading around $1,289 today and some are predicting...

Gold may struggle to rebound

The gold price is under further pressure today as investors exit the safe haven commodity in favour of the US dollar after yesterday’s positive...


Euro looks technically vulnerable

The Euro has come under pressure in recent days and now it seems its becoming technically vulnerable on the back of a head and shoulders...

Pound looks to $1.3500

British pound continues to surge today against its US counterpart, following on from yesterday’s gains on the back of booming inflation...

Gold may go much higher

Gold is powering ahead following on from gains of more than $20 yesterday after a missile test from North Korea greatly increased the chances...


Pound may be at a bottom

British pound has drifted lower midway through the European session, brushing off better than expected retail sales figures but some predict...

Possible conflict boosts gold

The gold price is on the rise today after comments by US president Donald `Trump about North Korea which increased the chances of a military conflict...

Pound may be sold off

The British Pound is trading higher for a 6th straight session today as the market awaits the latest interest rate decision from the Bank of England followed by a monitory press conference....

  


Share: