By Candice Zachariahs Nov. 7 (Bloomberg) -- Investors should sell Australia's currency against the U.S. dollar because it may lose 29 percent as it slumps toward a record amid a global recession, Morgan Stanley said. The Australian dollar, which dropped 27 percent in the past three months, may decline toward its April 2001 low of 47.75 U.S. cents as investors dump the nation's higher-yielding assets and retreat to the safety of the greenback, according to Ned Rumpeltin, a London-based currency strategist at Morgan Stanley. ``The most immediate concerns about the financial system may have eased, but worries about global growth prospects are now coming to the fore,'' Rumpeltin wrote in a research note yesterday. ``There is considerable scope for further declines.'' Australia's currency dropped the most in a week, falling 2.5 percent to 66.20 U.S. cents as of 12:07 p.m. in Sydney from 67.86 cents late in Asia yesterday. It reached an all-time high of 98.49 cents on July 16. Morgan Stanley lowered its forecast for the Australian dollar last month, predicting it would fall to 57 cents by year's end and then touch 47 cents by June 2009, the lowest since the currency was first freely traded in December 1983. The Aussie, as the currency is called, has tumbled since the collapse of Lehman Brothers Holdings Inc. in September paralyzed credit markets and caused equities to tumble as concern over a global recession spread. The International Monetary Fund yesterday predicted that global growth will slow to 2.2 percent next year amid the first simultaneous recession in the U.S., Japan and euro region in the post-World War II era. A growth rate of 3 percent or less is ``equivalent to a global recession,'' the IMF said as recently as April. The Australian economy will grow 1.8 percent in fiscal 2009, according to the IMF, as a A$10.4 billion ($6.85 billion) stimulus package from the government and aggressive interest rate cuts by the central bank boost the domestic economy. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net

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