The high-flying Australian and New Zealand dollars may pull back modestly in the coming months on global concerns, but will continue to be supported by their status as commodity currencies, a Reuters poll showed.The median forecast of more than 50 analysts polled by Reuters showed the Australian dollar gradually slipping to $1.015 in early 2013, although still above parity.
On Friday, it was up at $1.0680, having risen 5 percent so far this year. The Aussie and the New Zealand dollar, which is up 7 percent this year, are among the best performing major currencies in that period. See and for polls. "Residual eurozone uncertainties, including the outcome of Greek PSI negotiations, and the pace/magnitude of recent gains lead us to expect NZD/USD and AUD/USD to be modestly lower," said Hamish Pepper, an analyst at Barclays Capital in Singapore.
A survey of 46 analysts showed the New Zealand dollar was also expected to gently pull back to $0.78 mid-year, from $0.8300 where it currently stands. The Antipodean currencies have been in demand since the US Federal Reserve pledged to keep rates near zero out to late 2014 and triggered expectations of more easing. This is encouraging investors to borrow in dollars to fund carry trades in commodities and higher yielding assets.
Investors have been piling on long positions even though the Reserve Bank of Australia is almost certain to cut rates again next week partly because of global growth concerns as the European debt crisis drags on. With a current 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, unlike many of its peers.
STRETCHED POSITIONS Analysts warn, however, the Aussie bullish run could end abruptly. "As these net long positions become increasingly stretched, at some stage there will be a downward correction to the Antipodeans currencies and these players will likely become forced sellers," said Annette Beacher, head of Asia-Pacific research at TD Securities in Singapore.The kiwi has been a big favourite of momentum players and black box funds betting it can go a lot further yet, particularly as currencies like the yen and Swiss franc have been hemmed in by intervention.Barclays' Pepper expected New Zealand to maintain its yield advantage over other G10 economies given a likely extended period of extremely low interest rates in the US and eurozone.
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