The high-flying Aussie dollar is forecast to remain around parity for the coming year thanks to a robust economy and despite a deteriorating debt crisis in Europe and expectations for more interest rate cuts in Australia.
A Reuters poll of around 47 analysts showed the Australian dollar is seen in a tight range of $0.9900 to $1.0100 in the next 12 months. It is forecast to dip below parity in the first quarter of next year before fully recovering by the end of November. It was last trading at $1.0258.
The Aussie has had its strongest year since it was floated in 1983, showcasing an average of $1.0300. It climbed as high as $1.1081 in July and sank as deep as $0.9388 in October. Yet, only one forecaster sees the Aussie smashing this year's 29-year record high to $1.12. A couple of institutions believe the Aussie may tumble as low as 80 cents at some stage in 2012.
Earlier this week, Australia's central bank cut its cash rate to 4.25 percent, its second easing in two months, citing risks from the European debt crisis and a more benign inflation outlook at home.
Still, with a cash rate at 4.25 percent, Australia has one of the highest rates in the developed world and has room to cut further should it need to stimulate growth, unlikely many of its peers. A survey of around 41 analysts showed the New Zealand dollar was expected to gently pull back to $0.76 cents for most of next year, before edging back up to $0.77 cents in November. The kiwi was last trading at $0.7800.
Similarly to the Aussie, the kiwi has had a stellar year, with an average of 79.3 cents, having climbed a 30-year peak of $0.8842 in August. Only one forecaster sees the kiwi above that level, while one institution expects it to sink as low as 64 cents at some point in 2012.