The Australian dollar has continued to hover around the $.90 mark despite a weight of short positions anticipating a move lower

The Australian dollar has continued to hover around the $.90 mark despite a weight of short positions anticipating a move lower. Jim Vrondas, Chief Currency & Payment Strategist at OzForex, says he is expecting the AUD to head towards $.85 by year end and says another rate cut from the RBA should not be ruled out. Domestically two things Vrondas is watching closely are inflation and unemployment. He says inflation may creep above target rates but these moves are likely to be temporary. Of more concern to Vrondas is the unemployment rate which he believes could hit 6.5% by mid year as the economy continues to slow off the back of the mining peak. Whilst the RBA is on a watch status at the moment this position could be revised in light of more weak data. Full discussion on the outlook here: