Australian dollar under pressure as Goldman encourages Aussie shorts THE Australian dollar remains under pressure as banks slash forecasts and traders increasingly spruik shorting the currency. After a host of investment banks yesterday lowered their predictions for the dollar, HSBC today cut its year-end forecast to US90 cents, from US95c as the "currency war" intensifies. "The global currency war is escalating, the central banks are winning and the US dollar bull market is gaining momentum," said HSBC. It came as Goldman Sachs's Hong Kong office said in a note overnight that its "top trade recommendation" was to be short the Australian dollar versus the Norwegian Krone. Last week, high profile Bell Potter stockbroker Charlie Aitken predicted that a wave of hedge funds were set to short the currency. Goldman last week cut its cut its 12-month forecast for the Aussie to US90c, down from US98c, on bets that capital flows into the currency would slow. Yesterday, UBS and AMP Capital also lowered their forecasts, while Credit Suisse said the Aussie would fall to US92c in three months and US85c in 12 months. "Clients have asked whether our Australian dollar-bearish views are consistent with our forecast for a sustained pick-up in global growth starting in the second half of the year," the Goldman note said. The answer to this question is 'yes'. Goldman's thesis is based on its bet stronger global growth will not generate higher commodity prices due to abundant supply and that the Australian economy will lag the global cycle due to the peak in mining investment and "insufficient momentum in the rest of the economy to pick up the slack." "Lastly, Australia's carry credentials are likely to tarnish as other central banks hike rates and a more certain macro outlook diminishes the need for triple-A-rated assets," the note said.