Goldman cuts Aussie dollar forecast to 72 US cents

Sydney

AUSTRALIA'S dollar will fall 7 per cent this year to 72 US cents as a faster-than-anticipated plunge in commodity prices leaves the nation A$500 billion (S$526 billion) poorer in the coming decade, Goldman Sachs Group Inc said.

The US investment bank, which had previously forecast an exchange rate of 75 US cents, also brought forward to May its prediction for another interest-rate cut after the Reserve Bank of Australia (RBA) on Tuesday reduced the cash target by a quarter point to a record 2.25 per cent. The RBA will stay at 2 per cent and start lifting rates in the final quarter of 2016, Goldman economists led by Tim Toohey said in a report on Wednesday.