Noriel Roubini is one of the few economists and forecasters who foresaw the crash in US housing prices before they happened. His warnings went largely unheeded back then, but since that success he has built on his already solid reputation through his firm Roubini Economics.
Now news has broken in Asia today (via the SMH) that David Nowakowski, senior director of research at Roubini Economics, has forecast the Aussie dollar will fall to 75 cents.
The basis of the call is weaker Chinese growth, RBA rate cuts and the federal government’s move to fiscal austerity, Australian style.
Although some easing of China’s credit crunch will help Australian exports in the short run, we see lower Chinese growth in 2015 as a headwind that will weaken Australia’s growth and inflation next year, and weigh on growth-orientated assets such as equities and the Australian dollar.
Rates are expected to be cut to 2%, which adds further weight by cutting the interest rate pickup in favour of the Aussie dollar Roubini’s firm says.
Since the news broke earlier this afternoon the Aussie has been under pressure. A little over an hour ago sellers pushed it down through 89 cents and at 0.8880 it is at its lowest level since early February 2014.
Read more of the SMH story here
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