Australia’s dollar headed for its biggest monthly decline in more than two years on speculation a slowdown in China will weigh on the economy, prompting the Reserve Bank to cut interest rates this year.
The Aussie has slumped 5.2 percent over the past month, the among the 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The International Monetary Fund this week lowered its growth forecasts for China, Australia’s biggest trading partner. Dearborn, Michigan-based Ford Motor Co. cited foreign-exchange levels when it announced this month that it would stop making cars in Australia.
“We have a short position in Australian dollars,” said Park Sungjin, the head of asset management in Seoul at Meritz Securities Co., which oversees $7 billion. “The reason is their weak economy,” Park said, citing Ford’s decision. The Aussie will fall to 90 U.S. cents by year-end, he said.
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