Aussie Dollar Seen Buoyed By Recovery Hopes

(Monday, July 6, 2009) The Australian dollar is expected to remain strong at 80 U.S. cents in the next month, underpinned by hopes the worst of the global economic downturn has passed and speculation that interest rates at home have bottomed.

A monthly poll by Reuters produced a median forecast of $0.80 in a month's time for the Australian dollar, before easing to $0.7900 over the next six months and then advancing to $0.82 in a year. That was an upgrade from the previous poll. The Aussie is considered a barometer of global growth, reflecting its status as a major commodity exporter. "The supportive outlook for commodity prices and positive interest rate differentials should keep the Aussie well supported and one does not rule out a near-term move above $0.81," said Kenneth Broux, economist at Lloyds TSB. "Strong demand from China for Australian commodities may also help the Aussie to outperform in the near term."