BlackRock Inc. is shorting the Australian dollar on a bet the central bank will cut interest rates to as low as 0.5% to revive the struggling economy.
The Aussie will extend recent declines and probably fall as low as 65 U.S. cents next year, said Craig Vardy, head of fixed income for Australia in Sydney at BlackRock, which oversees $6.52 trillion. The Reserve Bank of Australia will keep easing as the economy cools and U.S.-China tensions weigh on global growth, he said.
BlackRock isn’t alone in expecting the RBA to keep easing. Franklin Templeton Investments and JPMorgan Chase & Co. say Aussie bonds will rally as the RBA lowers its benchmark to 0.5%. Commonwealth Bank of Australia, the nation’s biggest lender, revised its RBA forecast on Tuesday to predict two more rate cuts this year, taking the key rate to 0.75%.
Monthly Chart (Curve Time Frame) – monthly supply is at 88.500 and monthly demand is at 68.700.
Weekly Chart (Trend Time Frame) – the trend is down.
Daily Chart (Entry Time Frame) – the chart suggests to go short at the daily supply at 0.69500.
with a long term multi-year target at the monthly demand at 60.0000.
NOTE: if the trade goes in my favor, I plan to add onto the position.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.