Aussie Sliding Toward 60 U.S. Cents in Citigroup's 1998 Redux
- Australia's dependence on commodities to spur Aussie declines
- Citigroup's Fitzpatrick sees Fed raising policy rate in Q1
Australian one-hundred dollar banknotes are arranged for a photograph in Sydney, Australia, on Wednesday, April 17, 2013. Direct trading between the Australian dollar and yuan started on April 10.
Photographer: Ian Waldie/BloombergIf you want to know what lies ahead for Australia’s dollar look back to 1998, according to Citigroup Inc., the world’s largest currency trader.
Just as the Aussie was weighed down in the final years of the last decade by equity market jitters and sliding commodity prices, the currency will again fall in tandem with raw materials and slide toward 60 U.S. cents in this downtrend, said Thomas Fitzpatrick, a managing director for currency strategy at Citigroup. It traded at 72.09 U.S. cents as of 11:09 a.m. in Sydney on Thursday, having fallen 1.2 percent in the five days through Wednesday as the Bloomberg Commodity Index dropped 2.2 percent.