Australian Dollar Forecasts 2016 and 2017: ANZ See GBP/AUD Back at 2.0 by End of Next Year

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The Australian Dollar has more strength to give over the near-term but should decline in value through the course of 2017.

Those looking for their currency to strengthen against the Australian Dollar may have to be patient.

The latest projections for the Australian currency from ANZ suggest it should retain strength over the near and medium term but should ultimately weaken through the course of 2017.

For those looking to buy Australian Dollars with Sterling you may have to wait until the end of 2017 before you are offered two Aussie Dollars for your Pound again.

Near-Term AUD to Strengthen

An inactive Federal Reserve could be the prime driver of near-term Australian Dollar strength.

With US rates remaining low the potential for traders to further borrow in USD and invest in Australian debt remains high. This dynamic has been one of the long-term drivers of AUD strength, and looks set to remain so for some time.

“Hopes of a Fed hike in September look to have been dashed by data that was not strong enough, while near-term pricing of the RBA is also starting to look a bit stale given that we are still
five weeks away from the next CPI print,” say ANZ.

Resillient demand for commodities from China are expected to be another driver of AUD strength, as we note here.

ANZ say it is likely that the Australian domestic outlook could play a bigger role in the direction of the AUD once again, “and without significant disappointment, risks for the AUD are
to the upside”.

“Momentum is starting to pick up in the AUD crosses and so there is some danger that the AUD breaks higher,” say ANZ.

But ANZ believe valuation remains a concern for the AUD which looks too expensive and this will presumably lead to the longer-term softening the bank envisages.

Pound / Australian Dollar Forecasts

December 2016: 0.61, GBP/AUD: 1.6394

March 2017: 0.60, GBP/AUD: 1.666

June 2017: 0.58, GBP/AUD: 1.7241

September 2017: 0.53, GBP/AUD: 1.8868

December 2017: 0.50, GBP/AUD: 2.0

Australian Dollar / US Dollar Forecasts

December 2016: 0.76, USD/AUD: 1.3158

March 2017: 0.74, USD/AUD: 1.3514

June 2017: 0.72, USD/AUD: 1.3889

September 2017: 0.70, USD/AUD: 1.4286

December 2017: 0.60, USD/AUD: 1.6667

Euro / Australian Dollar Forecasts

December 2016: 0.72, EUR/AUD: 1.3889

March 2017: 0.70, EUR/AUD: 1.4286

June 2017: 0.67, EUR/AUD: 1.4925

September 2017: 0.64, EUR/AUD: 1.5625

December 2017: 0.62, EUR/AUD: 1.6129


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