Candice Zachariahs and Monami Yui
Nov. 30 (Bloomberg) -- The Australian dollar will probably rise above parity with its U.S. counterpart in the first quarter of next year, prompting a third of large domestic businesses to consider setting up offshore operations, Commonwealth Bank of Australia said, citing a survey.
The so-called Aussie will peak at $1.07 to $1.09 by the end of March, according to Commonwealth Bank’s Aussie Dollar Barometer report, based on a poll of almost 900 local businesses. The currency will trade at $1 in the first quarter, economists surveyed by Bloomberg News predict. It has weakened 5.3 percent in November amid concern the sovereign-debt crisis in Europe will dent global economic growth.
“If the global economy deteriorates further, the Australian dollar may not reach the very high levels expected by Australian businesses,” Joseph Capurso, a currency strategist at the nation’s largest lender in Sydney said in the e-mailed report today. “The deteriorating global economic outlook has pushed the Australian dollar down.”
The Aussie traded at 99.69 U.S. cents as of 5:00 p.m. in Sydney yesterday compared with a closing level of $1.0530 on Oct. 31. The currency rose as high as $1.1081 on July 27, the most since it was freely floated in 1983.
Thirty percent of large businesses with sales of at least A$500 million ($498 million) a year, and about 37 percent of exporters are considering establishing offshore operations because of the strong currency, according to the report.
Commonwealth Bank’s currency barometer is updated every three months and is based on a survey conducted by market research firm East & Partners.
--Editors: Jonathan Annells, Rocky Swift
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