SYDNEY, Sept 5: Analysts further trimmed forecasts for the Australian and New Zealand dollars in the latest Reuters poll, reflecting expectations the U.S. Federal Reserve will start winding down its massive stimulus programme sooner rather than later.
A poll of 49 analysts put the Aussie at $0.8920 on a one-month horizon, compared to a forecast of $0.9000 in July and $1.0300 as recently as May.
Analysts see the currency at $0.8800 cents in six months and $0.8700 in a year.
If right, it means the Aussie’s sizable bounce this week is not set to last. The currency was up at around $0.9170 on Thursday after a very short market was caught out by firmer-than expected economic data.
It had touched a three-year trough of $0.8848 in August.
The Aussie is still down around 14 percent since April and remains vulnerable to broad U.S. Dollar strength should the Fed start to curb its super easy policy later this month.
Another area of concern is the domestic economy which has yet to show clear signs the Reserve Bank of Australia’s (RBA) easier policy is working its magic.
The central bank left rates unchanged at a record low of 2.5 percent at its monthly policy meeting this week, which led markets to price out any further easing at all.
However, much depends on how the Australian dollar fares and whether non-mining sectors of the economy gain enough speed to replace a cooling resources boom.
Many analysts suspect that should the Aussie hold above 90 U.S. Cents, the RBA will choose to offset it by cutting rates again.
KIWI
Likewise, the median one-month forecast put the kiwi around $0.7800, from its current level of $0.7900, a poll of 45 analysts showed.
The New Zealand dollar is then forecast to dip again to $0.7700 in three-months, a level expected to be maintained until August next year.
The kiwi has shown remarkable resilience compared with its Aussie cousin, reflecting solid domestic growth and expectations interest rates will rise, albeit not for some time.
It has managed to bounced back from one-year lows struck in August following a major food scare in the country’s all-important dairy industry. It has lost 4.6 percent against the greenback this year.
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