Three drivers of a lower Aussie

AMP Capital

AMP Capital

The $A has more downside and is being driven lower by a combination of : 1. Stronger $US - undergoing a loner term upswing supported by relative strength in the US economy. Fed being closer to monetary tightening in contrast to Europe, Japan and China. 2. Secular downtrend in commodity prices thanks to surging supply and lower demand in combination with the rising value of the $US, as commodities are priced in $US. 3. The relative performance of the Australian economy has deteriorated and this is seeing the interest rate differential in favour of the $A decline, making it relatively less attractive to park money in Australia as part of the “carry trade”. The AUD is likely to fall to around $US0.70 by year end and then into the $US0.60s as part of an overshoot on the downside to make up for the damage done by the strong $A years. The downtrend in the $A will help the Australian economy and share market, but highlights the case for global investments denominated in foreign currencies. For the full article the (VIEW LINK)


2 topics

AMP Capital is one of the world's leading investment houses, with a 160-year pioneering heritage. Our enviable track record in real estate and infrastructure is coupled with deep expertise in fixed income, equities and multi-asset investments.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.