Australian dollar forecast to fall below US68 cents

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Bell Potter analyst Charlie Aitken has forecast an Australian dollar at US68¢, interest rates below 2 per cent, and a stockmarket at 6000 after radically revising his predictions.

The Australian dollar has already slipped back below US78c on the back of better-than-expected jobs figures out of the US.

At 6.30am (AEDT) on Monday, the local currency was trading at US77.70c, down from US78.41c on Friday.

The US economy pumped out a better-than-expected 257,000 new jobs in January, official figures showed, while wage growth rebounded firmly after December’s fall.

The forecast is based on an analysis of markets between 1956 and 2015, which showed a strong correlation between commodity booms and busts and the value of the local currency.

The last peak in the AUD, at $1.10US cents, was in 2011, two months after commodity markets hit a high.