The Australian dollar is on the rise again and could reach parity with the US dollar in the next 3-4 months, according to a currency expert.
Jim Vrondas, chief currency and payment strategist, Asia-Pacific at OzForex, expects the dollar to continue its rise in the short term given the current global economic climate.
“The Australian dollar seems bullet proof at the moment,” he said in a recent interview on Radio 2GB. “There is not much standing in its way.
“It is currently heading for .95c (alongside the US dollar) and could be close to parity over the next three to four months.”
This bold prediction is sure to send shockwaves through Australia’s export community, which has been banking on a softening of the dollar this year.
“The expectation of a lower Australia dollar is still there, Mr Vrondas said. “But the horizon has been pushed out for another 12-18 months in my view.”
Mr Vrondas said the current upward spiral has been caused mainly by the RBA’s neutral stance on interest rates combined with a much weaker US dollar and Euro.
And the recent release of positive home loans data has given the dollar a further boost.
The Australian dollar is currently trading around .93c against the Greenback and .67c against the Euro.
Mr Vrondas predicts it will increase further against both currencies in coming weeks.
Only weak unemployment figures can now put the brakes on the dollar, he says.