Dollar to Slide below $US1 by Yearend

Analysts and forecasters today boldly projected that the Australian dollar will grow weak and will mostly likely end the year 2012 with a rate that’s below $US1. The projection is attributed to the global economy’s continuous slowdown, as well as the overall increase in prices of exports commodities.

The National Australia Bank (NAB), in fact, estimates that the dollar will fall by 97 US cents by yearend. Analysts also say this is the closest estimate, which is based on the last six quarters of how the dollar has performed in the Bloomberg Rankings.

It should be noted that in December 31 of last year, the Australian Dollar closed at 99 US cents.

Other experts are also expecting the drop, which began last June 26, to continue for the next six weeks. It should be the longest stretch for the Australian Dollar, which last had this kind of performance in the market in 2009.

According to Ray Attrill, global growth has wilted when compared to the last three to six months. He added that China appears to have slowed faster than expected and this has directly affected the price of coal and iron ore.

Attrill is currency strategy co-head of NAB.

The global economy is a “challenging environment” according to another analyst and economist. But the slowdown may actually be generally milder as other currencies. In fact, the Australian Dollar ranks as the fifth strongest among other currencies in more advanced economies.

Additionally, the country is not running on huge deficits, despite declines in trades. But experts do admit that, “things will still get worse before it gets better.”