Some Analysts Think The Aussie Dollar Is Set For A Big Slide

After the Australian dollar hit parity in recent days, there are some pretty bearish views on where the currency is headed over the coming years.

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Many think there is a big correction coming as the US Fed looks to bring its huge run of bond buying to an end.

Don Williams from Platypus Asset Management told Michael Bennett at The Australian: “It was inevitable it would crack and you’ve just seen the start of a new trend, so instead of sideways I think we are going to drift down relatively consistently over the next two to three years.

“If the old range used to be US50c to US90c and the average was around US65c, maybe the average now is US75c to US85c.

And RBS FX strategist Greg Gibbs says: “We can see the AUD fall proving frustratingly slow at times, and it may back-fill its recent fall to $US1.02, on a renewed sense that the [Reserve Bank of Australia] rate cutting cycle has ended. But the bigger picture is likely to be towards a weaker AUD.”

Not everyone agrees though – HSBC’s Paul Bloxham says he “wouldn’t be holding my breath for a large fall in the AUD” – because he thinks commodities prices will remain strong.

More here.

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