Here’s an outlook for the Australian dollar from Dr. Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital Investors:
The Australian dollar – still more to fall
In summary (but more detail at the linked article):
Right now the broad trend in the $A remains down and investors are getting “paid” less to hedge as the RBA has cut interest rates (2% pa compared to around 3.5% pa 3 years ago). As a result it makes sense to take advantage of the diversification benefits of other currencies by having a greater unhedged exposure than a decade or so ago.
The one major currency where this may not apply is the Yen where further weakness against the $US is likely.
AMP Capital is a large global investment manager headquartered in Sydney, Australia, part of the AMP Group, Australia’s largest retail and corporate pension provider, and largest life insurance provider.
