NAB: Australian dollar to equal the greenback

from MoneyTrading.com.au

Australian dollar will trade level with the US dollar in as little as three months, according to National Australia Bank, which said higher interest rates and commodity prices will lead to a sharp appreciation in the currency.

The bank said soaring prices for iron ore and coal would speed up the pace of economic growth and force the Reserve Bank of Australia to intervene with aggressive rate rises to prevent the re-emergence of inflation, The Australian Financial Review reports.

The Australian dollar rose as high as US93¢ in January but has since slipped back to around US90.5¢.

But NAB said the increasingly upbeat outlook for the economy and the prospect of rising interest rates would lift the currency to parity with the US dollar in three to six months.

The upbeat forecast matches a similar call by JPMorgan, which predicts the currency can trade equal with the US dollar within months.