Australian dollar likely to struggle with USD: Read By Investing.com

Citi FX analysts provided insight into the Australian dollar’s performance against various currencies, predicting a challenging path for the AUD.

According to the brokerage firm, the recent sharp drop in the exchange rate points to a long-term ceiling formed just below ¥110 per Australian dollar last month. They anticipate that any rally will be constrained between the 100-day and 200-day moving averages, currently 100 to 102 yen per Australian dollar.

Analysts also estimate that the AUDJPY pair could fall 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 $0.67 to $0.68 per Australian dollar, with the potential to decline to $0.63 to $0.64 USD in a de-risking environment towards the end of the year.

In contrast to its performance against the yen and US dollar, the Australian dollar is expected to appreciate against the New Zealand dollar. This outlook is supported by the Reserve Bank of New Zealand’s (RBNZ) decision to ease monetary policy, which Citi believes has marked the pair’s lowest level at around NZD 1.09 per Australian dollar.

Citi expects the AUDNZD exchange rate to rise to NZD 1.11 to NZD 1.12 in the near term. Additionally, analysts would not be surprised to see the pair hit the 2022 high of around NZD 1.14 per AUD in the next few months.

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