The Australian dollar’s strength as a consequence of global monetary policies may mean short-term Australian interest rates remain lower for longer, according to Pacific Investment Management Co.
The Aussie at 95.50 U.S. cents “means short-term Aussie interest rates lower for even longer,” Robert Mead, a Sydney-based money manager for Pimco, which runs the world’s largest debt fund, wrote in a Twitter post today.
The Aussie dollar touched its strongest level in four months as an agreement among U.S. lawmakers to end a government shutdown and raise the nation’s debt limit buoyed demand for higher-yielding assets. The currency also gained after minutes of the Reserve Bank of Australia’s October meeting released this week showed officials agreed the bank should “neither close off the possibility of reducing rates further nor signal an imminent intention to reduce them.”
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