The Australian dollar is expected to be at 75 US cents by December 2018 and 77 US cents by December 2019, according to the latest report from CommBank currency strategists. Previously, the forecast had been 78 US cents by December 2018 and 83 US cents by December 2019.
The US economy and the US Federal Reserve “are currently standing tall as pillars of strength, while the global economy outside of the US is moderating”, CommBank currency strategists said in a note released 22 June 2018.
Persistent low wage and inflation growth has led some central banks to stall on cash rate tightening cycles while US-China trade tensions have escalated and there are rising emerging market tensions, CommBank said.
This environment is “generating risks the global economic expansion further slows, particularly as China’s economic growth rate loses momentum”.
CommBank said it now anticipates the US dollar (USD) will remain firm for most of the remainder of 2018.
The information in this article is correct as at 22 June 2018.