The latest Oliver’s Insights, written by Shane Oliver (AMP’s head of Investment Strategy and Chief Economist), discusses the likelihood of the Australian dollar loosing ground against the $US and Euro.

Key points include:

  • The rising tide in favour of the $A has well and truly reversed with further downside likely in the years ahead, particularly against the $US and Euro.
  • The commodity price boom has faded in response to a moderation in Chinese growth as commodity supply increases, the US is slowing its quantitative easing program and rate cuts have reduced the attractiveness of the $A all at a time that it remains above levels that offset relatively high costs and prices in Australia. Expect it to fall to around $US0.80 in the next few years.
  • For Australian investors, this means less need to hedge global exposures back to Australian dollars.

For the complete article click here: Australian-dollar-still-more-to-fall

As these articles often raise questions, please contact your adviser on 03 5559 7111 to discuss any concerns.