© Dukascopy Bank
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Antje Praefcke
Senior FX Strategist
Commerzbank
AUD/USD
For the moment we are quite positive for the Aussie. First of all, we still observe quite high commodity prices combined with a rather stable current mood on the financial markets. These factors support the Australian Dollar which additionally benefits from the sound fundamentals, such as favourable fiscal situation in Australia, very low GDP ratio, as well as dynamic Asian development, particularly, Chinese growth. The above mentioned creates an image of an attractive currency for the Aussie. Currently the AUD/USD pair is heading towards the level of 1.05 and we do not exclude that it may even break this level and attempt to touch higher levels afterwards.
At the end of the Q1 2012 we expect the Australian Dollar to trade very comfortably above parity, that is for sure. The Aussie's behavior depends on the risk sentiment and on the development of commodity markets. In case if the risk sentiment keeps on being steady and rather friendly, we should be able to see the Australian Dollar at the end of the Q1 around the levels of 1.05 and 1.06.
At the end of 2012 we do not anticipate the risk aversion to come off strongly. We consider that the problem of the Eurozone will remain on the financial markets and uncertainty will stay elevated.
NZD/USD
The Kiwi is often perceived as a small cousin of the Australian Dollar. It is mainly based on soft commodities and is currently in a similar situation as the Aussie which means it is likely to demonstrate roughly the Aussie's performance equivalent over the year. Nevertheless, Kiwi has inferior fundamentals compared to Australian Dollar. The New Zealand Dollar has just broke the level of 0.80 against the Dollar and we await it to touch the 0.81; however, we do not rule out the possibility of it increasing up to the 0.82 level. Throughout 2012 the American Dollar will gain some ground back, however, overall, the Kiwi Dollar will display a good performance over the whole year as well.