So says Roubini Economics senior director of research, David Nowakowski in today’s Sydney Morning Herald who cites the following
- Australia GDP will dip to 2% next year which will allow RBA to cut interest rates
- will trigger a 20% slide in AUD
- slower Chinese expansion in 2015 will be a headwind for Australia’s economy and inflation
The Australian dollar is likely to weaken to below US75¢ – a fall of around 20% – on a combination of the lower interest rate differential and slumping GDP growth, with commodity price effects outweighing volumes
Seems like the article was published about an hour or so ago and might explain much of the AUD sell-off earlier if the news was out there prior but it’s just hit the wires. In Eamonn’s wrap thread Harry did report a similar report in the Australian Financial Review earlier but I can’t see anything there online. Anyone else see something ?
SMH article here
AUDUSD 0.8910 having held 0.8900 so far