WILLING TON: The Australian and New Zealand dollars are likely to stay resilient this year, a Reuters poll showed, even as fears of a global trade war spark wild gyrations in currency markets.
The survey of 33-47 analysts plotted an uneventful future for the Australian dollar, which is seen at $0.7700 in one-month, $0.7800 in three months, $0.7720 in six months and $0.7900 over a one-year horizon.
That would be an unusually flat profile for the typically volatile currency. Over 2017, for example, the Aussie went from as low as $0.7165 to as high as $0.8125 before ending the year just above $0.7800. It currently sits at $0.7684.
The currency began 2018 on a solid footing, soaring to a 2-1/2-year peak of $0.8136 in late January.
But it toppled from the highs on a cocktail of factors, including the risk of faster rate rises in the United States and the spectre of a trade war after US President Donald Trump slapped import tariffs on certain goods, including steel.
The move met with tit-for-tat measures by China, spooking investors who fear the deepening spat between the world’s biggest economies could derail global growth which is seeing its first synchronised upturn in several years.
The ongoing uncertainty might explain the wide range in the forecasts from as low as $0.7000 and as high as $0.8600 on a one-year horizon.
While a reduction in trade would hurt both Australia and New Zealand, most analysts see the Aussie as being more vulnerable to a trade war, recommending buying the kiwi as a hedge.
