Citi FX analysts provided insight into the Australian dollar’s performance against several currencies, predicting a challenging path ahead for the AUD.
According to the brokerage firm, the recent sharp decline in the exchange rate points to a long-term ceiling that stood at just under ¥110 per Australian dollar last month. They expect any recovery to be limited between the 100- and 200-day moving averages, currently at ¥100 to ¥102 per Australian dollar.
The analysts also predict that the AUDJPY pair could dip below the recent low of around ¥90 per Australian dollar next year. For the short-term outlook for the Australian dollar against the US dollar, Citi expects the recovery to peak at USD0.67 to USD0.68 per Australian dollar, with a potential decline to USD0.63 to USD0.64 in a risky environment towards the end of the year.
In contrast to its performance against the yen and US dollar, the Australian dollar is forecast to appreciate against the New Zealand dollar. This outlook is reinforced by the Reserve Bank of New Zealand’s (RBNZ) decision to ease monetary policy. This was likely the low for the pair at around NZD1.09 per Australian dollar, according to Citi.
Citi predicts the AUDNZD exchange rate will rise to NZD1.11 to NZD1.12 in the near term. Moreover, analysts wouldn’t be surprised if the pair hits 2022 highs of around NZD1.14 per Australian dollar in the coming months.
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