John Abernethy: The Aussie needs to be in the low 60's to stop a recession
Yesterday the RBA released its index of commodity prices. It showed that over the past year, the index has fallen by 20.9 per cent in Special Drawing Rights terms (see chart below), led by declines in the prices of bulk commodities. The index has fallen by 7.4 per cent in Australian dollar terms over the past year. John Abernethy, CIO of Clime Investment Management believes that “given what is happening in oil, coal and iron ore Australia has an incredible external shock occurring in terms of foreign income… the only thing that can offset that is the currency… We are looking at a situation where the currency to protect the economy from going into recession needs to be in the low 60’s”. Watch the video below to see Abernethy fully explain his rationale.