By Wayne Cole
SYDNEY (Reuters) - Analysts think the worst may already be over for the hard-hit Australian and New Zealand dollars and see them slowly regaining ground over the year ahead, a surprising mark of faith given the economic carnage caused by the coronavirus.
Analysts polled by Reuters see the Aussie at $0.6020
That was a steep downgrade from the $0.6700 predicted in the last poll in February, reflecting the wild swings seen since then. Indeed, the market was so manic a poll could not be conducted properly in March.
The Aussie plunged from $0.6700 to a 17-year low of $0.5510 in a nine-day period in early March, as the spread of the virus sent global markets into a tailspin.
Now, the median forecast was for the Aussie to creep up to $0.6100 in three months, $0.6300 in six and $0.6600 on a one-year horizon.
Yet estimates ranged widely - from $0.5200 to $0.6800 on a three-month view - reflecting uncertainty on how long the economic impact of the pandemic might last.
Economists fear Australian output (GDP) could fall by 5% or more this quarter, from the first quarter, even though the Reserve Bank of Australia (RBA) cut rates to a record low of 0.25% and the government launched a massive stimulus package.
With much of the world also shut down, that is a wall of worry to climb for a commodity-leveraged currency such as the Aussie.
"Growing fears that prolonged shutdowns around the world will exacerbate the global economic contraction will keep AUD and NZD on the back foot in our view," said Joseph Capurso, a senior currency strategist at CBA.
"We still expect AUD to fall to $0.5700, and probably lower, while NZD is heading for $0.5500, and probably lower."
The kiwi has fared almost as badly as the Aussie in the past month, tumbling to a decade low of $0.5469
Again median forecasts suggested it was near a floor, with $0.5900 seen in one month and $0.6000 in three. Estimates ranged all the way from $0.5200 to $0.6500.
From there, analysts tipped it at $0.6100 in six months and $0.6400 on a one-year horizon.
(Polling by Sujith Pai, Indradip Ghosh and Khushboo Mittal; Editing by Jacqueline Wong)