Paul Moore: Dollar could go below 50 cents

Paul Moore, Chief Investment Officer of PM Capital, maintains fully unhedged in his global portfolio and expects to benefit from further falls in the Australian dollar. Moore highlights that currency cycles tend to take place over a number of years, and we are still only 18 months or so from recent peaks. “Typically these cycles last for 3 – 5 years minimum… So I suspect we have another 2-3 years of declines but not as sharp and rapid as what we have seen.” Moore says he wouldn’t be surprised to see a bit of a bounce in the short term but says further downside will be determined by the severity of the economic downturn in China. “If it’s a shallow downturn, maybe mid 60s ends up being the low. But if it gets a little bit worse than people expect, and I think there is a good probability of that, then we could see 50cents or lower.” In this interview Moore explains why he believes the Chinese markets need a final capitulation before a bottom can be found.