Economists at BNP Paribas expect a bullish year for AUD/USD and NZD/USD in 2024.
Positive developments in China’s economy to support Aussie and Kiwi
Further support for AUD and NZD is expected from a potential medium-term recovery in China.
We raise our end-2024 forecasts for AUD/USD to 0.70 from 0.65 and NZD/USD to 0.63 from 0.59.
Capital expenditure recovery (CAPEX) in Australia, now aligned with other commodity exporters, supports a strong AUD. Higher commodity prices due to increased production capacity could boost AUD appreciation. Compared to other G10 currencies (excluding Japan), there have been fewer rate cuts for the Reserve Bank of Australia (RBA), making the interest rate channel more supportive for the AUD.
