In the Australian Financial Review this morning:
- Goldman Sachs says betting against the Australian dollar is one of its top trade recommendations
- When the US Fed begins to “taper” it will remove a key support for the Aussie$
The prospect of “tapering” is one of the key reasons Goldman Sachs bets the Australian dollar will fall to US85¢ by the end of next year. The US investment bank is releasing its top trade recommendations for 2014 and a bet against the Australian dollar was included in its first release.
“Over the last year or so, the Australian dollar has also become increasingly negatively correlated with US rates, which is exactly the characteristic that we seek,” Goldman said in a note to clients. “In addition, we think it is facing its own headwinds, and from a pure currency perspective, relative to most other G10 currencies and major emerging markets, it is a currency where we still expect reasonable declines.”
$A falls below US91¢, Goldman says bet against it Australian Financial Review(gated)
Hate to be a cynic, and I have a lot of time for the AFR, but it always makes me nervous when currency moves get into the papers (we saw a “Goldman Sachs bearish outlook for Australia 2014 growth” report 2 days ago, here)
