MS: The Australian dollar may fall to 65 US cents

The Australian dollar may fall to its lowest level against the USD since the financial crisis, according to Morgan Stanley forecasts.
The Australian dollar may fall to 65 US cents in 2019, after the Australian central bank's interest rates are expected to fall below those in the US, according to Hans Redeker, an analyst at the bank.
As Australian interest rates fall below those of the US, the currency of the country will break its correlation with the other currencies of developing countries, says Redeker.
The weakness of the Australian currency will also be largely predetermined by competition coming from the currencies of developed countries that attract investor's interest as a source of security.
The additional interest rate of 10-year Australian bonds over that of 10-year US bonds was at 19 basis points yesterday after reaching the 16-year minimum of 15 basis points in June.
The last time the spread between the two interest rates was so small was in 2001, when the Australian dollar fell to 47.76 cents.