Analysts again trimmed forecasts for the Australian and New Zealand dollars to reflect expectations of falling interest rates, as central banks across the globe ease to support sputtering economies and ward off deflation. A Reuters poll of 50 analysts sees the Aussie edging down to 77 cents by May and then reaching 75 cents by early 2016.
It hit a six-year trough of $0.7627 this week after the Reserve Bank of Australia (RBA) surprised some by cutting interest rates on Tuesday for the first time in 18 months. Market levels imply a one-in-five chance of a another rate cut in March and are fully priced for a move by June.
The Aussie is also set to face more pressure from an improving US economy, which is expected to see the Federal Reserve begin raising rates this year. The Aussie last stood at $0.7820, having shed 4 percent so far this year. As usual, opinions varied widely with forecasts ranging from $0.6750 cents to 85 cents on a one-year horizon. A separate survey of 43 analysts showed a downgrade for the New Zealand dollar, with the median forecast putting it at 70 cents in 12 months, from $0.7408 currently. It plumbed a four-year trough of $0.7177 this week to show a loss of 5 percent so far this year.