SYDNEY, May 17 (Xinhua) -- The Australian dollar is currently sitting at its lowest levels in three years, trading below 69 U.S. cents, with some experts expecting it to sink even further.
Westpac Bank senior currency strategist, Sean Callow told Xinhua on Friday that there were a number of factors contributing to the Aussie's predicament, including international trade uncertainty and expectations for a cut to the country's official interest rate by the end of the year.
"The Aussie's really got a few different weights on top of it at the moment so it is really struggling," Callow said.
The most significant weight on the Aussie according to Callow is the expectation that the Reserve Bank of Australia (RBA) will cut interest rates from an already record low, 1.5 percent by the end of the year.
With interest rates on hold since August 2016, a speech by RBA Governor, Philip Lowe in February of this year signalled that a cut was the next likely move and kick started the Aussie's decline from above 72 U.S. cents.
Over the past month that descent has steepened with a number of local data releases showing low inflation, a decline in employment and muted wage growth for the first part of the year.
"After all that, the markets are now pricing more than two rate cuts which is really quite remarkable," Callow said.
And he expects that the Australian dollar could go even further towards Westpac's long standing prediction of 68 U.S. cents by September.
While things can always change, Callow said the Aussie is unlikely to go much further than that due to rate cuts already being priced into markets, as well as a solidly performing resource export industry which is underpinning a trade surplus.
