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SYDNEY: Analysts have sharply upgraded forecasts for the Australian and New Zealand dollars in the latest Reuters poll, rushing to match their meteoric rally as investors wagered heavily on global economic reopening even as the coronavirus refused to fade.

Median forecasts for the Aussie were lifted by four cents across the board, putting it at $0.6800 on a one- and three-month horizon, $0.7000 in six months and $0.7200 in one year.

The market was still just ahead with the currency sitting at $0.6920 on Thursday, having surged 3.4% last month and a whopping 12.5% over the June quarter.

Australia's reliance on commodity exports and Chinese demand has made it a bellwether for global growth and as countries have reopened so its currency has climbed.

Strong export earnings have turned Australia's perennial current account deficit into a surplus for the first time since the 1970s, providing a fundamental boost to the Aussie.

The country has also contained the coronavirus much more effectively than many of its peers, allowing the domestic economy to re-start far earlier than first feared.

"The global recovery, Australia's well-perceived handling of the crisis in comparison to other parts of the world and its trade linkages to China suggests the Aussie could approach levels closer to 76 US cents," said Janu Chan, a senior economist at St. George Bank.

"We have revised our end of year forecast to $0.7200 and our forecast for the end of 2021 is $0.7600."

The New Zealand dollar has fared much the same, rising 4% last month and 8% in the June quarter to stand at $0.6479. That compares to a trough of $0.5469 touched during the market chaos of mid-March.

As a result, the analysts median forecasts put the kiwi at $0.6400 in one month, up from $0.6000 in the previous poll. It was also seen at $0.6400 in three months time, up from $0.6100.

Yet analysts seemed to doubt it would go much further with $0.6500 forecasted on both a six- and 12-month horizon.

That could be partly because of the risk the Reserve Bank of New Zealand (RBNZ) would lean against any further appreciation as it goes all out to shield the domestic economy.

The central bank has repeatedly threatened to take interest rates negative should the economy not recover as hoped and even suggested it might buy foreign assets as a way to restrain its currency.

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