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.
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 stillfive 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 areto 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.
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
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
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