5 Factors driving the Aussie dollar 2016

5 Factors driving the Aussie dollar 2016 The Australian economy's external position is worsening and the currency will fall below US50¢ once foreign investors realise the nation is spending like it is "stuck in 2006" and rates decline, a top bond fund manager argues. Vimal Gor, who is head of income and fixed interest at BT Investment Management and one of the market's more bearish thinkers, says he has been too optimistic on the Australian currency at US50¢ and "US40¢ is now our base case". The Australian dollar is around US74¢. Mr Gor correctly predicted that the Reserve Bank of Australia would cut interest rates, which it did in May, and he sees the cycle finishing at 1 per cent "if not lower", and the Australian economy regarded as an emerging market. "Low rates in an economy like Australia will genuinely be a test of the stability of an economy that has a very specific relationship with the rest of the world," he said in his latest monthly update to clients.