Goldman Marking AUD & NZD Forecasts To Market

Goldman Sachs note that “the rapidly shifting macro backdrop has required us to reassess our outlook for AUD & NZD. On the one hand, our economists have recently revised down our growth forecasts in the Euro area and the U.S., and risks to global growth still look skewed to the downside. On the other hand, our economists pulled forward their forecast for RBA lift-off on the back of higher-than-expected inflation, Asia underperformance has not played out as we anticipated, and rising commodity prices, particularly coal and iron ore prices, have notably benefitted Australia’s terms of trade. As a result, we are marking-to-market our AUD & NZD forecasts across our 3-, 6-, and 12-month forecast horizon, raising AUD/USD to $0.73 (vs. $0.70, $0.70, $0.71 previously) and NZD/USD to $0.68 (vs. $0.66, $0.66, $0.67 previously). Thus, we are also turning more neutral on the AUD/NZD cross with a flat forecast of NZ$1.07 over the next 12 months (vs. NZ$1.06, NZ$1.06, NZ$1.06 previously).”