Australian dollar unlikely to rise beyond parity: analysts

10:54, December 31, 2010      

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The Australian dollar would be unlikely to rise further in 2011, said currency analysts on Friday.

The Australian dollar rose almost 20 U.S. cents since June to its peak of 101.98 U.S. cents on Dec. 30. It was once trading at 101.63 cents on New Year's Eve, having gained around 12 percent over 2010.

The Australian dollar's first move above parity, since the unit was floated on Dec. 3, 1983, came on Oct. 15, 2010, when U.S. Federal Reserve Chairman Ben Bernanke said that the central bank stood ready to support the U.S. economy "if needed".

Financial advisory services provider TD Securities senior strategist Annette Beacher said the Australian dollar was likely to have peaked at parity and would have settled at 88 U.S. cents by the end of 2011.

"It's not because the Aussie dollar doesn't have a good set of fundamentals. It's just that we think the outcome of quantitative easing and other programs will get the U.S. economy back on track, " she said.

Meanwhile, chief economist Stephen Roberts from Nomura Australia, the stock broker in Australia, said the Australian dollar would stay "quite high", but said the unit would sustain some pressure as global currencies improve in 2011.

"The suspicion is the U.S. dollar, for example, will begin to find its feet over the next 12 months," he said.

However, currency strategist Joseph Capurso from Commonwealth Bank, one of the four big banks in Australia, said the Australian dollar could rise further because of Australia's close relationship with the developing economies of Asia.

"Between now and into the early months of next year, you will see the Aussie bopping up and down around parity," he said.

"Our economy is so tightly woven in Asia, it's an important reason the Aussie is at parity," Capurso said.

Source: Xinhua
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