Analysts trimmed their bearish outlook on the Australian and New Zealand dollars as the likelihood of stable domestic interest rates were expected to underpin their yield appeal in a world of low returns. A Reuters poll of 52 analysts saw the Aussie at 75 US cents in one month, one cent stronger than in the February poll as the currency rallied past most forecasts.
Still, the general expectation was that it would weaken over time from $0.7550 currently, reaching $0.7400 in three months and $0.7300 in six and 12 months. The Aussie skidded to a one-month low on Friday at $0.7544, having lost around two cents in six sessions.
The Antipodean currencies' fat yields could limit losses as the central banks of Australia and New Zealand were widely expected to keep rates steady this year. The Reserve Bank of Australia (RBA) holds its monthly policy meeting on March 7 and is seen certain to keep rates at a record low 1.5 percent.
Debt futures imply a scant chance of a cut this year. With 10-year Australian bonds offering yields of 2.8 percent, their returns are far more attractive than the 1.2 percent in the UK and near zero in Japan. New Zealand bonds offer 3.3 percent, the highest in the developed world.
Across the Tasman Sea, the New Zealand dollar was expected to slip, but only modestly. Like its neighbour, it has dropped around two cents since last week to trade at $0.7042.
A poll of 44 analysts produced a similar forecast as in the February survey, seeing the kiwi at 71 cents in one month and 70 cents in three months.
On the longer-term, forecasts were not as bearish as last month, putting the kiwi at $0.6950 in six months, versus $0.6500 in the February poll, and $0.6875 in one year against $0.6867 previously.