Aussie dollar could hit US$1.12 by September
(29 April 2011 – Australia) The Commonwealth Bank of Australia (CBA) raised its forecasts for the dollar, predicting that the Aussie would reach US$1.12 by the end of September before easing to US$1.04 by the end of the year.
CBA chief currency strategist Richard Grace said an extended period of US dollar weakness and a greater volume of international capital invested in the Australian dollar and a lift in trade had triggered the upgrade.
'We now believe the USD won't recover until the Fed formally changes their monetary policy guidance from an easing bias to a tightening bias,' Mr Grace wrote in a research note.
Westpac senior currency strategist Sean Callow said the greenback slid against major currencies upon expectations the US Federal Reserve would keep monetary policy "super loose".
'Everyone assumes that the Fed will continue with its quantitative easing/money printing program,' Mr Callow said.
'We now believe the USD won't recover until the Fed formally changes their monetary policy guidance from an easing bias to a tightening bias,' Mr Grace wrote in a research note.
Westpac senior currency strategist Sean Callow said the greenback slid against major currencies upon expectations the US Federal Reserve would keep monetary policy "super loose".
'Everyone assumes that the Fed will continue with its quantitative easing/money printing program,' Mr Callow said.
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