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Australian Dollar Interest Rate Forecast
Friday, 12 September 2008 16:28:24 GMT  |  David Rodriguez, Quantitative Analyst
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Australian Dollar Interest Rate Bias: Bearish

The Australian dollar currently enjoys the second-highest short-term interest rates of the G10 currency universe, but sharply negative rate expectations clearly diminish the attractiveness of Aussie yields. Deterioration in fundamental outlook for the Australian economy has clearly played a part in outlook for domestic interest rates, as forecasts for a broad slowdown in global economic growth hurts highly export-dependent Australian growth. Given such dynamics, interest rate prospects are almost inarguably bearish for the Australian dollar through the foreseeable future.

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