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Australian Dollar May Drop to 70 Cents This Year: BlackRock

  • Australia’s 10-year yield deficit may swell to 50 basis points
  • U.S. dollar may gain another 5% as economy booms, Vardy says
Images Of Australian Dollar

Photographer: Ian Waldie/Bloomberg

Updated on

Australia’s dollar is at risk of sliding to 70 U.S. cents this year as China’s economy slows and the Federal Reserve keeps raising U.S. interest rates, according to BlackRock Inc.

The Aussie tumbled below 74 cents on Tuesday for the first time in a year amid a worsening trade dispute between the U.S. and China, Australia’s largest trading partner. The currency faces more pressure as policy divergence sees Australian bond yields drop further below those of U.S. Treasuries, said Craig Vardy, BlackRock’s head of fixed income for Australia. The Aussie last traded at 70 cents in February 2016.