World Economy

Aussie $ at Risk

Aussie $ at RiskAussie $ at Risk

A fund manager who predicted before most economists that the Reserve Bank of Australia would cut its benchmark below 2%, says there’s a risk that the Aussie dollar could almost halve to an unprecedented 40 US cents, a level significantly below where most forecasters see the currency, Bloomberg reported. BT Investment Management’s Sydney-based head of income and fixed interest, Vimal Gor, who oversees the equivalent of about $11 billion, said in a newsletter published Thursday that the outlook for the currency was “worrying” and that his previous view on it had been overly optimistic. The Aussie, which bought 74.15 cents on Friday in Sydney, has averaged 88 cents over the past decade and the post-float low is 47.76 touched in 2001. The median forecast in a Bloomberg survey of analysts is for the currency to weaken to 72 by year-end and strengthen in subsequent years. Gor also predicted that the Reserve Bank of Australia will be forced to cut its cash rate from 1.75% to 1% or lower.