The Australian dollar – which appeared to be on course for a return to parity with the U.S. dollar just days ago – is set to end the year below $0.90, say strategists.
Reserve Bank of Australia (RBA) governor Glenn Stevens is partially responsible. His comment Thursday that the Aussie is “overvalued, and not just by a few cents,” sent the currency as low as $0.9329. It edged up slightly to $0.9353 on Friday.
“The RBA is going to continue to jawbone the currency lower. If you’ve got a central bank talking down the currency, this is likely to discourage foreign investors from investing in Australian assets,” David Forrester, currency strategist at Macquarie told CNBC. He sees the currency falling to $0.88 by year-end.
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