Home AUD/USD to 0.75 says Dr. Doom – 5 reasons
Forex News Today: Daily Trading News

AUD/USD to 0.75 says Dr. Doom – 5 reasons

Nouriel Roubini, also known as Dr. Doom after predicting the global financial crisis, sees dark forecasts for Australia’s economy and says the currency is likely to weaken to 75 cents against the dollar – over 1300 pips from the price at the time of writing.

Is the recent fall of the Aussie just the beginning? Here are 5 reasons for an Aussie slump, extracted from the words of the famous economist’s firm:

It is important to note Roubini  is bearish most of the time, and his record is not clean of mistakes. However, with the fall of the prices of iron ore at a new 5 year low of $81.70 on Friday, he may have some valid points.

The economist  mentions a few  reasons for the fall:

  1. Slowing Chinese growth is likely to continue hitting commodity prices.
  2. Weakness in  consumer activity
  3. Weakness in investment
  4. Fiscal austerity that is “poorly timed”.
  5. Housing boom  “increasingly out of line with fundamentals”

This may all result in the RBA cutting the interest to 2% from the current 2.50% and with the upcoming tightening of policy from the Federal Reserve, the end result according to Roubini is a  plunge of AUD/USD to 0.75.

The last time that AUD/USD traded at 0.75 was back in May 2009. That’s over 5 years ago. Here’s a big picture chart showing quite a few levels below: 0.8655 is the cycle low. 0.8060 is the 2010 low and  0.6066 is the post crisis low.

For more recent levels, see the AUD USD forecast.

AUDUSD to 75 Nouriel Roubini doom forecast for Australian dollar USD

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.