'If Europe is somehow able to stabilise, the Australian dollar will probably fall another couple of US cents,'' he says. But if Greece exits the euro, the Australian dollar could ''go through 90¢, but it's anyone's guess,'' he says.
However, the fundamentals of the Australian economy remain strong and in ''normal'' circumstances, the Australian dollar should trade between US95¢ and US105¢, Sherwood says. ''With the industrialising and urbanising of much of Asia and rising demand for commodities, I tend to think that's the natural range for the Australian dollar,'' he says.
Oliver says that by the end of the year, the Australian dollar should be back to more than US100¢, or parity, with the US dollar. The American economy is improving and interest rates in Europe should fall further.
The Australian dollar's fortunes are tied to the outlook for global growth because of Australia's reliance on commodities exports.
In periods of uncertainty, international investors seek out US dollar-denominated assets as a safe haven.
Currency is notoriously difficult to forecast (some say it's impossible), as so many variables are at play.
One reason for the stronger Australian dollar is our relatively high interest rates when interest rates around the rest of the world are low. Global capital chases high interest rates, which helps support our dollar.
. My preference would be closer to the latter.
