AUD and NZD year-end forecast lowered – ANZ

FXStreet (Barcelona) - The Team at ANZ explains the risks ahead for the Aussie and the Kiwi, and further lower their year-end forecast or the antipodeans, expecting AUD/USD to move towards 0.72 and NZD/USD to weaken to 0.70.

Key Quotes

“The shift in our AUD and NZD forecasts is predicated on the USD having been slightly stronger than we had anticipated. This means that we have reached levels in both currencies at a pace that is slightly faster than fundamentals would have suggested, and thus, there is further downside still to come.”

“Fundamentals in Australia have developed broadly in line with expectations and the distribution of risk around the evolution of these fundamentals has also not changed all that drastically.”

“Risks to commodity prices are skewed to the downside, while interest rate spread compression will also likely weigh on the AUD.”

“For NZD, the high yield and the RBNZ on a prolonged hold (but not easing) mean that the currency will be supported. But the kiwi will not be immune to broader USD moves, though we expect it to outperform AUD.”

“Our new year-end forecasts for AUD/USD is 0.72 (from 0.74) and NZD/USD is 0.70 (from 0.72).”