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Goldman Cuts Aussie Forecast to 72 Cents as Commodities Plunge

Australia’s dollar will fall 7 percent this year to 72 U.S. cents as a faster-than-anticipated plunge in commodity prices leaves the nation A$500 billion ($388 billion) poorer in the coming decade, Goldman Sachs Group Inc. said.

The U.S. investment bank, which had previously forecast an exchange rate of 75 cents, also brought forward to May its prediction for another interest-rate cut after the Reserve Bank of Australia on Tuesday reduced the cash target by a quarter point to a record 2.25 percent. The RBA will stay at 2 percent and start lifting rates in the final quarter of 2016, Goldman economists led by Tim Toohey said in an e-mailed report Wednesday.