Views dif­fer on dol­lar di­rec­tion

Tasmanian Country - - NEWS -

NA­TIONAL Aus­tralia Bank is fore­cast­ing the Aus­tralian dol­lar to fall to US75c by the end of this year, pro­vid­ing some grad­ual re­lief from re­cent strength in the lo­cal cur­rency.

The bank ex­pects the Aus­tralian dol­lar to trade as low as US73c for most of next year.

In its lat­est Ru­ral Com­modi­ties Wrap, the NAB has re­vised its short-term ex­change rate fore­casts higher than last month’s es­ti­mates by about US2c.

The bank said that at the start of Au­gust, its mod­el­ling sug­gested the fair value for the Aus­tralian cur­rency was around US77.1c

“Now five weeks later, fair value sits at 0.792 and the fair value range is 0.765 to 0.818,” it said.

The NAB said the Aus­tralian dol­lar was likely to re­main in the US78c to US80.5c range in the short term but was to fall pro­gres­sively in the com­ing year.

The NAB’s fore­cast is in stark con­trast to that of the Com­mon­wealth Bank of Aus­tralia, which has tipped the Aus­tralian dol­lar to end this year at US80c and climb to US85c by De­cem­ber next year.

The dif­fer­ing fore­casts come as the Aus­tralian dol­lar hit a two-year high of US81c last week.

NAB said the Aus­tralian dol­lar re­mained sen­si­tive to bad news, such as do­mes­tic data or global risk sen­ti­ment, prompt­ing the bank to lower its longer-term fore­casts for the ex­change rate.

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