Australian Dollar Forecasters See Rally Ending Soon

The Australian dollar's strong rally may be coming to an end, according to top forecasters. The currency has risen over 3.5% since July due to expectations of a Reserve Bank of Australia rate hike.

SB1 Markets AS predicts the Aussie will fall by as much as 3.7% by year-end, while Banco Santander SA sees it reaching 70 US cents by December. Danske Bank AS also expects it to retreat to that level by as early as December.

This bearish outlook is due to several factors, including the potential for a resolution in the Middle East conflict and subsequent decline in oil prices. The Aussie has been boosted by weakness in the US dollar, but this support may be short-lived following Federal Reserve Chairman Kevin Warsh's hawkish rhetoric.