Dollar Drops


Dollar drops to a nine week low with more rate cuts on the horizon
The Australian dollar has fallen to a nine week low, sliding to US74 cents over the weekend, with economists forecasting more rate cuts.
With the Reserve Bank forecasting that Australia’s core inflation is unlikely to reach the bottom the bottom of its target of 2 to 3 per cent, River Capital’s head of co-investment Josh Ackman says it will be another 10 years before we see interest rates at 4 per cent.
“Inflation running at the bottom of the band as a base case is rather uncomfortable,’’ Sean Callow, a senior foreign exchange strategist at Westpac told Bloomberg. “Aussie dollar trading ranges for the rest of the year just ratcheted lower.
On Friday, the Australian dollar slid 0.9 percent to 73.97 U.S. cents. At one stage, it reached 73.82, the lowest level since March 4.
Callow forecast more rate cuts, which would send the dollar even lower.
“All of a sudden the market is thinking that 1.50 percent might not be the low on the RBA cash rate,” Callow said.

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