Analysts Are Stoic About the Aussie's Slide
- Currency dropped 4.5% over the past month, worst G10 performer
- Inflation-adjusted yields higher than U.S., Germany, Canada
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For a clue on why global currency strategists see an end to the Australian dollar’s tumble, look at the yields the nation’s bonds offer after accounting for inflation.
So-called real yields on Australia’s 10-year bonds are higher than in the U.S. and compare with negative levels for debt sold by Canada, France, Germany, Japan, Sweden and the U.K. That may limit the central bank’s ability to weaken the Aussie with lower interest rates. Citigroup Inc., the world’s largest foreign-exchange trader, says the currency remains attractive in a “world of zero interest rates.”