Australia’s central bank probably will succeed in capping the local currency this year as it seeks to boost an economy that’s losing full-time jobs at the fastest pace in two decades, Tokyo-based money manager Diam Co. said.
The Aussie’s biggest annual slide in five years in 2013 didn’t prevent Reserve Bank of Australia Governor Glenn Stevens from reiterating the need for a weaker currency. Diam, which manages about $120 billion, said Stevens probably won’t tolerate Aussie strength while growth remains muted. Daiwa SB Investments Ltd. said it won’t add further to its holdings until the RBA curbs efforts to verbally drive the exchange rate lower.
“Monetary authorities in Australia are emphasizing their stance of checking currency strength,” Hideya Kubo, a senior fund manager at Diam, said in a Jan. 15 phone interview. “The Australian dollar will have a hard time rising this year, as interest-rate hikes by the RBA are also likely to be in the distant future.”
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