UBS: Australian Dollar Could Hit US80 cents

The Australian dollar is widely tipped to remain under pressure this year, but a leading fund manager warns investors risk missing a possible sharp rebound in the currency, which could lead to a rally towards US80¢ as global interest rates remain stuck at record low levels. David Sokulsky, UBS Wealth Management head of investment strategy, said the investment bank’s base case was for the Australian dollar to trade at US71¢ by year’s end and US65¢ in 12 months.

The market has forecast the Aussie to hit US70¢ in the fourth quarter of 2015 and US69¢ for the bulk of 2016, according to Bloomberg. But the moves of the world’s central banks remained uncertain and could reverse the recent depreciation in the Aussie, Dr Sokulsky said.

It was quite possible that the US Federal Reserve would keep interest rates on hold indefinitely amid global volatility, while the European Central Bank and Bank of Japan launched fresh quantitative easing measures and the Bank of England eased monetary policy to fight deflation, Dr Sokulsky said.