The Australian dollar is unlikely to fall much in the months ahead mainly because of a lack of high yielding alternatives, a Reuters poll of analysts showed, even as financial markets expect the central bank to further cut interest rates.
The median forecast of 52 analysts showed the Aussie at $1.0300 in a month's time before gradually crawling lower to $1.007 by this time next year. This compares with $1.0344 where it currently stands. But the forecasts ranged from a low of $0.8500 to a high of $1.0800 for the 12-month view, suggesting great uncertainty in the outlook.
The Aussie's strength is a major reason why a majority of economists expect the Reserve Bank of Australia (RBA) to cut its cash rate by 25 basis points to 3.0 percent on Tuesday, matching record lows reached during the global financial crisis. A separate survey showed analysts expect an equally resilient New Zealand dollar. The median forecast was for the kiwi to be at $0.8200 in a month and $0.8100 in one year, slightly below its current level of $0.8243.
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