Australia’s skeptics are finding comfort in numbers, but that doesn’t mean they’ll necessarily be right. Last week, a Goldman Sachs economist wrote that the Australian economy has a 20 percent chance of entering recession over the next year, and numerous media ran with it. Among the familiar headwinds cited were the still relatively high Australian dollar, falling commodity prices, and the high cost of doing business.

Australian Treasurer Wayne Swan bristled at the Goldman economist’s assertion, noting that this was the third time the investment bank had issued this forecast in the past five years. But Swan’s government faces long odds at the polls this September, so one might expect him to strike such a defensive tone.

Although Australia has now enjoyed more than 21 years of economic expansion, that hasn’t stopped investors from attempting to discount the challenges currently facing the economy. Last week, the S&P/ASX 200 fell to its lowest level since the beginning of the year, tumbling from its May 14 high of 5220.99 by nearly 10.1 percent. The index has since somewhat recovered, gaining 3.5 percent, though it’s still down 6.9 percent from its earlier high.

By contrast, the minutes from the Reserve Bank of Australia’s (RBA) monetary policy meeting in early June suggest that the economy should continue growing at slightly below its long-term annual growth rate of 3.5 percent. For instance, gross domestic product grew 2.5 percent year over year during the first quarter.

Of particular note is that though Australia’s resource boom has clearly peaked, the central bank expects mining investment to remain at a high level for the next year or so. Beyond that period, the RBA conceded that there’s “considerable uncertainty” due to competition from other countries, particularly with regard to gas exports.

Australia’s resource sector accounts for 13.5 percent of gross domestic product, so the economy is susceptible to the industry’s boom-and-bust cycle. Although expectations are dimming for an imminent recovery in commodity prices, investors should pay close attention to whether China’s economic growth can regain momentum. China is a key export market for Australia’s energy commodities, particularly coal and iron.

Although the RBA characterized China’s economy as expanding at a steady pace, data this year have surprised to the downside, with the possibility that the country could miss its annual growth target of 7.5 percent. In May, China’s exports to the US and EU, its top two markets, fell from a year ago for the third consecutive month. Meanwhile, imports declined 0.3 percent versus forecasts of a 6 percent rise, due to a drop in commodities shipments.

As expectations for full-year growth adjust to this new reality, that increases the possibility that China’s central bank could cut interest rates. Of course, the RBA is already in the midst of a rate-cutting cycle, with its most recent cut in early May taking its cash rate to a 50-year low of 2.75 percent. Investors are betting that the next rate cut could come as soon as August.

The Australian dollar has also sold off sharply over the past two months, with the short side getting crowded and institutional analysts rushing to lower their price targets. Even so, that means traders are achieving what the RBA’s monetary policy had thus far failed to do.  

The Aussie dollar began its descent in earnest following US Federal Reserve Chairman Ben Bernanke’s remarks in early May that the central bank was contemplating when to curtail some of its extraordinary easing. That caused currency traders to abandon the Aussie and pile into US dollars, as they assumed the Fed could start winding down its bond-purchasing program within the next couple months.

However, Bernanke struck a more measured tone in his latest remarks earlier today, noting any change in policy is dependent upon continued improvement in what have been otherwise mixed economic data, with the earliest move possible in the fall. Although it remains to be seen whether economic data support such an action at that time, traders appear to have reacted as if the Fed Chief’s conjecture is actually a firm timetable: The Aussie dipped to a new low for the year, at USD0.9295, following Bernanke’s press conference.

Complicating this selloff is the possibility that the International Monetary Fund (IMF) could confirm the Aussie’s status as a reserve currency next week. That could provide some stability for the currency, as central banks typically take a long-term perspective toward their reserves. According to the Wall Street Journal, National Australia Bank estimates that IMF data could show that the Aussie represents as much as 2 percent of the roughly USD11 trillion in total global reserves, which would amount to USD200 billion to USD250 billion.

Obviously, a sharply lower Aussie along with a historically low interest rate environment are two necessary precursors for Australia’s economic growth to rebound to its long-term trend. But the Aussie’s status is likely to remain volatile in the months ahead, as perceptions shift regarding the currency’s formalized reserve status as well as future Fed policy. Still, the currency’s overall downward trend should make Australia more competitive globally and, therefore, reduce the risk of recession.

The Roundup

Here’s when AE Portfolio Holdings will report their next sets of financial and operating numbers. Some have “confirmed” dates, while for others we’ve provided an “estimate.”

For most, this will cover the full fiscal year ending June 30, 2013. We’ve noted for others that report on a different schedule the period to which the announcement pertains.

Conservative Holdings

• Aberdeen Asia-Pacific Income Fund (NYSE: FAX)–N/A (fund, reports holdings on a quarterly basis)
• AGL Energy Ltd (ASX: AGK, OTC: AGLNF, ADR: AGLNY)–Aug. 21, 2013 (estimate)
• APA Group (ASX: APA, OTC: APAJF)–Aug. 21, 2013
• Australand Property Group Ltd (ASX: ALZ, OTC: AUAOF)–July 24, 2013 (2013 H1, confirmed)
• Australia & New Zealand Banking Group Ltd (ASX: ANZ, OTC: ANEWF, ADR: ANZBY)–April 30, 2013 (FY 2013 H1, confirmed)
• Cardno Ltd (ASX: CDD, OTC: COLDF)–Aug. 13, 2013 (estimate)
• CSL Ltd (ASX: CSL, OTC: CMXHF, ADR: CMXHY)–Aug. 21, 2013 (estimate)
• Envestra Ltd (ASX: ENV, OTC: EVSRF)–Aug. 22, 2013 (estimate)
• GPT Group (ASX: GPT, OTC: GPTGF)–Aug. 12, 2013 (2013 H1, estimate)
• M2 Telecommunications Group Ltd (ASX: MTU, OTC: MTCZF)–Aug. 26, 2013 (estimate)
• Ramsay Health Care Ltd (ASX: RHC, OTC: RMSUF)–Aug. 22, 2013 (estimate)
• SMS Management & Technology Ltd (ASX: SMX, OTC: SMSUF)–Aug. 14, 2013 (estimate)
• Telstra Corp Ltd (ASX: TLS, OTC: TTRAF, ADR: TLSYY)–Aug. 8, 2013 (confirmed)
• Transurban Group (ASX: TCL, OTC: TRAUF)–Aug. 6, 2013 (estimate)
• Wesfarmers Ltd (ASX: WES, OTC: WFAFF, ADR: WFAFY)–Aug. 15, 2013 (estimate)

Aggressive Holdings

• Amalgamated Holdings Ltd (ASX: AHD, OTC: None)–Aug. 22, 2013 (estimate)
• Ausdrill Ltd (ASX: ASL, OTC: AUSDF)–Aug. 28, 2013 (estimate)
• BHP Billiton Ltd (ASX: BHP, NYSE: BHP)–Aug. 21, 2013 (estimate)
• GrainCorp Ltd (ASX: GNC, OTC: GRCLF)–May 16, 2013 (FY 2013 H1, confirmed)
• Mineral Resources Ltd (ASX: MIN, OTC: MALRF)–Aug. 15, 2013 (estimate)
• Newcrest Mining Ltd (ASX: NCM, OTC: NCMGF, ADR: NCMGY)–Aug. 12, 2013 (estimate)
• Oil Search Ltd (ASX: OSH, OTC: OISHF, ADR: OISHY)–Aug. 12, 2013 (2013 H1, estimate)
• Origin Energy Ltd (ASX: ORG, OTC: OGFGF, ADR: OGFGY)–Aug. 22, 2013 (estimate)
• Rio Tinto Ltd (ASX: RIO, NYSE: RIO)–Aug. 8, 2013 (2013 H1, confirmed)
• Spark Infrastructure Group (ASX: SKI, OTC: SFDPF)–Aug. 26, 2013 (2013 H1, estimate)
• Woodside Petroleum Ltd (ASX: WPL, OTC: WOPEF, ADR: WOPEY)–Aug. 21, 2013 (2013 H1, estimate)
• WorleyParsons Ltd (ASX: WOR, OTC: WYGPF, ADR: WYGPY)–Aug. 28, 2013 (estimate)