Return of volatility to bust Aussie's strong run
Correlation with commodity prices to regain importance in medium term
The Australian dollar is set to decline against its US peer as renewed volatility in the currency markets threatens to undermine its status as a target currency for carry trades, which should drive it lower and bring it more in line with economic fundamentals, according to strategists.
Over the past few years the Australian dollar has become a popular target for carry-trade strategies that rely on borrowing low-yielding currencies and investing them in high interest rate units. Carry strategies
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