Australian dollar to weaken to US$0.70 by December: Capital Economics

Quotes from Capital Economics:

- The differential between Australian and US interest rates could shrink quite fast. In the past, this has typically been associated with a weaker Australian dollar. At face value, the interest rate differential we expect by December suggests that the Australian dollar could weaken as far as US$0.60 from US$0.78 today. 

- But as a commodity currency, it should receive some support from the stabilisation of commodity prices. And we expect many of them to edge up over the year. 

- As such, we expect the Australian dollar to weaken to US$0.70 by December, though the risks to this forecast may be skewed to the downside.