The Australian dollar's top forecaster has a warning: the worst...

The Australian dollar's top forecaster has a warning: the worst is yet to come.

Investors should bet against the Aussie and short it versus the Japanese yen as increasing global-trade tensions weigh on the Australia's exports, according to CIMB Bank. The currency is also poised to decline versus the US dollar, says CIMB, which had the most accurate estimates for the Aussie in Bloomberg's second-quarter rankings.

"On all fronts, the US-China trade war is Aussie-negative," said Marcus Wong, a treasury strategist at CIMB in Singapore.

"Retaliatory action that inadvertently impacts the upstream or downstream of China's value chain, or leads to a keen deterioration in global risk sentiment, would see a further deterioration in the Aussie."

Investors should sell the Aussie against the yen with a short-term target of 80.50 yen, CIMB's Wong said. If the US-China dispute intensifies, Australia's currency may slide to 76.50 yen, which would be the lowest since September 2016, he said. The Aussie traded at 82.08 yen on Tuesday.

https://www.theage.com.au/business/...come-top-forecaster-says-20180725-p4ztfl.html