The surging Australian dollar should keep most of its gains in coming months to hold around parity on speculation domestic rates, already among the highest in the developed world, may head even higher, a poll showed on Thursday. A Reuters poll of around 47 analysts showed the Australian dollar is seen staying strong at $1.0000 in the next month, before pulling back slightly to $0.9900 over three months and $0.9800 on a 12-month horizon.
The Reserve Bank of Australia kept its key cash rate unchanged at 4.75 percent after its monthly policy meeting this week, well above that of most other developed nations. Booming export earnings have been boosting profits, investment, employment and incomes and is a major reason the RBA is still likely to lift rates again this year, despite recent natural disasters that could drag a little on the economy.
Strong global manufacturing data also points to continued robust demand for Australia's resources, notably iron ore and coal, the nation's top exports. The RBA's pre-emptive tightening contrasts with the Federal Reserve which has committed to near zero rates until unemployment shows clear signs of going down.
The Australian dollar tore to a month-high of A$1.0149 this week with the market now seeing the RBA hiking rates by 24 basis points in the next 12 months. The Aussie gained more than 13 percent in 2010 to hit a 28-year peak on the US dollar and a record high on the euro. Likewise, the New Zealand dollar was seen firm in coming months before retreating a little within a year.
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