Foreign exchange analysts expect the Australian and New Zealand dollars to rebound next year, a Reuters poll showed, even as fears of a global slowdown loom over the battered currencies. A Reuters survey of up to 45 analysts saw median predictions for the Aussie at $0.7285 on a one-month horizon, from $0.7100 in the previous poll and current levels of $0.7220.
Analysts marginally bumped up their projections for 3 months to $0.7300 while retaining their outlook for six- and 12-months at $0.7300 and $0.7500. Such expectations come amid renewed downward pressure on the Australian currency, which has shed 7.7 percent since the start of the year. It hit a 2-1/2 year trough of $0.7021 in October.
The trade-exposed currency has been used by investors to wager on, or hedge against, tensions in emerging markets and the risks to the Chinese economy from US tariffs.
In addition, underwhelming recent data at home has led investors to completely wipe out the chance of a rate rise until mid-2020, further weighing on the Aussie.
While the Reserve Bank of Australia (RBA) has repeatedly stated that its rates will remain at historic lows for some time to come, futures markets are now pricing in a small chance of a cut following disappointing economic growth data on Wednesday.
"Overall, 2019 looks like it has the potential to make 2018 look like it was straight forward," said ANZ analyst Daniel Been. "The global growth trend will slow, policy inertia and tighter credit will intensify the weakness in liquidity and geopolitics will remain at the forefront," he added. "Within this we maintain our view that the AUD and NZD will underperform."
ANZ is among only a handful of analysts in the Reuters poll to forecast a fall under $0.7000. It sees the Aussie at $0.6800 in three months and $0.6700 in six.
For the kiwi, analysts upgraded their predictions but still see it easing from current levels of $0.6885.
They see the currency at $0.6750 in three-months, $0.6950 six-months out and then a slight uptick to $0.6950 in a year's time.
The downside risk was perceived as greater, though, with forecasts stretching as low at $0.6100 on twelve-month view. The kiwi has lost about 3 percent of its value so far this, paring some of their earlier losses on better-than-expected economic data lately.