Analysts are predicting further falls in the Australian dollar after the currency dropped dramatically over the past three weeks, falling almost six US cents, from 94 US cents to a near eight-month low of 88.18 US cents.
And the closer the US central bank gets to raising interest rates, which is expected to start in 2015, the lower the Australian dollar is likely to go.
The Australian dollar is expected to finish 2014 at 87 US cents, according to currency analysts. And they are forecasting a trading range of between 77 US cents right up to 95 US cents in 2015.
“The wheels are finally beginning to fall off the Australian dollar after a prolonged time at historically high levels,” a ThinkForex senior markets analyst, Matt Simpson, said.
He said the currency would trade between 77 and 85 US cents next year.
He said the Australian dollar typically traded around 70 to 80 US cents before the global financial crisis, after which it was considered a safe haven by investors who had previously never traded it, resulting in an inflated currency.
The Australian dollar has been considered attractive by investors because they can get high yields – among the best in the world – without higher risk.
via The Guardian