The key point is that the RBA will, in my estimation and assessment, cut interest rates at least once, probably twice and possibly more over the next 3 to 12 months. Yields will fall sharply from current levels if this happens and it is likely the AUD will be crunched lower as a result.
Which brings me to the call: the RBA will cut interest rates around July and November, when it’s clear inflation is contained, the unemployment rate is high and housing is cooling.
A 1.0 per cent cash rate would see Australian yields well below those of the US and in that case, the AUD will rapidly go to hell in a handbasket – 0.7000 and lower beckons.
These views have been well telegraphed to my clients.
For this blog, please note that the above material is NOT investment advise – seek professional guidance and trade at your own risk.