RBA Cut May Kill-Off AUD/USD

With Australia’s feeble economic performance raising the specter of interest rate cuts to fresh record lows, what does this mean for the trodden down Aussie dollar?

A whole lot more pain, according to foreign exchange strategists, who see the currency tumbling below $0.80 next year to levels not seen since mid-2009.

The commodity-linked currency has declined 6.6 percent against the U.S. dollar year to date, hurt by a combination of a strengthening greenback and Australia’s deteriorating terms of trade. It is currently trading at a four-year low of $0.83.


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