To its recent low of US$0.8640 the Australian dollar fell a bit too far too fast (just as the US dollar has risen too far to fast), so a short covering bounce has been underway and could go further. That said the broad trend in the Australian dollar is likely to remain down reflecting soft commodity prices, the likelihood the Fed hikes interest rates before the RBA and the relatively high cost base in Australia. Expect to see it fall to around US$0.80 in the next year or so.
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