Analysts at Goldman Sachs think that the Reserve Bank of Australia may be forced to cut interest rates, even after the US Federal Reserve tightens.
The specialists say that Australian economy is weak, while the unemployment rate is rising, while AUD is overvalued. According to Goldman, from a domestic perspective Australian interest rates may seem low, but compared with the rest of the world they are still relatively high. As a result, the demand for Australian assets, particularly fixed income assets for foreigners, is very strong. As a result, there’s scope for lower rates in this country.