High Australian dollar a worry for exporters
The Australian dollar zipped past US80c yesterday, reaching the highest level in eight months, US81.06c, this morning.
Foreign exchange analysts saw investors sell the greenback amid rising levels of US government debt. Others said that the Australian dollar was back in favour due to returning risk appetites.
And although our interest rates are low, they are high compared with other economies, said Commonwealth Bank currency strategist Joseph Capurso: “Our economy appears to be doing quite well and that means our interest rates aren’t going to fall too much further.”
He predicted the dollar could climb to US90c by this time next year.
Other economists said the dollar would fall back to US70c by the end of the year on the back of another interest rate cut some time in the next six months, closing the gap between US and Australian interest rates.