Pacific Investment Management Co. is seeking to profit from declines in the Australian dollar and yen against the U.S. currency even after the Federal Reserve signaled it wasn’t in a hurry to raise borrowing costs.
Additional interest-rate cuts by the Reserve Bank of Australia and a slump in commodity prices, caused by a slowing Chinese economy, will weigh on the Aussie, Adam Bowe, a money manager at Pimco in Sydney, said in a report posted on the company’s website Friday in Tokyo. The risk the Bank of Japan will expand stimulus and that investors in the country will shift toward overseas stocks and bonds will cause the yen to weaken, he said.
“Our highest conviction views are in the currency markets, and we remain short the yen and the Australian dollar against a long U.S. dollar position,” Bowe said. “We still expect the macro environment to remain challenging in Asia.”
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