If you’re thinking of booking an
overseas holiday, get in quick because the Aussie dollar’s time above
US80c is going to be short-lived.
The currency shot up as much as US2c to a four-month high of US81.63c yesterday on speculation that the US Federal Reserve won’t be raising its interest rate this year, after the release of flat retail spending figures.
But LTG GoldRock director Andrew Barnett is certain the Fed will hike its Federal Funds Rate before the end of the year.
“They will raise rates in the US and I think the Australian economy will continue to weaken and I suspect the Aussie dollar to be significantly weaker. “I think the rally is going to be reasonably short-lived,” he said.
Mr Barnett is also expecting another interest rate cut by the Reserve Bank of Australia later in the year, which will also push the local currency lower.
He added that there has been a pattern over the past few years of
the Australian dollar losing value between the federal budget and
September.
Last year it fell US12c during that time, and in 2013 it lost US15c. “I don’t anticipate that to be any different this year,” he said.
At 5:06pm (AEST) today the unit was buying US80.44c compared with US81.27c at the same time yesterday.
OANDA Australia and Asia Pacific senior trader Stephen Innes said the RBA won’t be please about the Aussie dollar’s rally but doesn’t believe it will intervene to push it lower. “It’s equally unlikely bank officials will cut interest rates at the next meeting,” he said.
“What we can expect is for the RBA to stick to its usual game plan of talking the currency lower. But if the Aussie continues pressing higher, one should not rule out any aggressive moves by the RBA.”
Mr Innes said the economic slowdown in China is also likely to put downward pressure on the Aussie dollar.
The currency shot up as much as US2c to a four-month high of US81.63c yesterday on speculation that the US Federal Reserve won’t be raising its interest rate this year, after the release of flat retail spending figures.
But LTG GoldRock director Andrew Barnett is certain the Fed will hike its Federal Funds Rate before the end of the year.
“They will raise rates in the US and I think the Australian economy will continue to weaken and I suspect the Aussie dollar to be significantly weaker. “I think the rally is going to be reasonably short-lived,” he said.
Mr Barnett is also expecting another interest rate cut by the Reserve Bank of Australia later in the year, which will also push the local currency lower.
Last year it fell US12c during that time, and in 2013 it lost US15c. “I don’t anticipate that to be any different this year,” he said.
At 5:06pm (AEST) today the unit was buying US80.44c compared with US81.27c at the same time yesterday.
OANDA Australia and Asia Pacific senior trader Stephen Innes said the RBA won’t be please about the Aussie dollar’s rally but doesn’t believe it will intervene to push it lower. “It’s equally unlikely bank officials will cut interest rates at the next meeting,” he said.
“What we can expect is for the RBA to stick to its usual game plan of talking the currency lower. But if the Aussie continues pressing higher, one should not rule out any aggressive moves by the RBA.”
Mr Innes said the economic slowdown in China is also likely to put downward pressure on the Aussie dollar.
No comments:
Post a Comment