The Australian currency’s top forecaster is predicting an almost 9 percent drop by the end of 2014, exceeding the consensus outlook, as the Federal Reserve’s taper of stimulus policies will revive a faltering U.S. dollar.
HSBC Holdings Plc, the most accurate at predicting the Aussie over the past four quarters in data compiled by Bloomberg, expects it to fall to 90 U.S. cents by Dec. 31 and 86 cents by the end of 2014 from 94.22 at 5 p.m. yesterday in Sydney. The currency climbed last quarter by the most since 2011, prompting economists surveyed by Bloomberg to raise their end-2014 forecast to 89 cents from 88 as recently as Sept. 18.
“The markets got a bit more excited about Aussie recently, but we don’t share that enthusiasm,” David Bloom, the London-based global head of currency strategy at HSBC, said by phone on Oct. 4. “The Aussie will continue to fall slowly but surely as the resurgent U.S. dollar sweeps all in its wake, driven by an eventual tapering by the Federal Reserve.”
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