AUD/USD to fall back to 51c-52c

With the increasing severity of the drought, our grain and livestock exports will be slashed.

This will ensure our Balance of Trade slips further into the red for many, many months into the future. This will of course further increase our monthly CAD.

Should this lead to a negative change in offshore investor confidence in the AUD, or even the sniff of same by currency punters, then one could expect to see the AUD/USD around the 51c-52c level very quickly.