The Australian dollar is trending lower today in late trading ahead of separate speeches tomorrow by RBA assistant governor Malcolm Edey and RBA governor Glenn Stevens.
The local currency has been rallying on the back of strong employment figures, commodity prices and a dovish outlook from the US Federal Reserve.
The big question is whether now Glenn Stevens will jawbone the currency in an effort to drive the Aussie dollar lower into the central banks comfort zone, and also to appease exporters who are starting to feel the effect s of a higher currency.
The recent rise in the Australian dollar is overdone and a big correction is on the horizon according to the world’s biggest fund manager.
BlackRock's Sydney-based head of fixed income for Australia, Stephen Miller, predicts the Aussie dollar will see a new 7 year low below US68c in the nearest future as is not buying into the story that this is a sustainable trend,
"The Aussie dollar is a volatile currency, it's sometimes a case of five steps down and two steps up," said Miller. "We're in the two steps up phase and the next phase will be the five steps down phase." Mr Miller noted.
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