4 Expert Australian Dollar Forecasts for 2019 Compared
Forecasts for the Australian Dollar from bank experts are revised throughout the year. This article looks at the different outlooks and is updated regularly.
In a recent survey of economists by the Australian Financial Review, only 9 from 25 economists forecasted the Australian dollar to be under 70 cents half way through 2019. These forecasts came a day before the AUD/USD hit a 10-year low of 0.6730.
ANZ made a slight adjustment lower to its AUD forecast late last year and remains negative on the AUD. With the AUD/USD falling faster than initial expectations in 2018, the bank moved its 2019 year-end forecast to 70 cents, down from 72 cents.
National Australia Bank (NAB) has a similar outlook to the CBA in 2019. It's sees the local currency strengthening throughout the year to finish close to 10% higher.
Westpac lowered year-end forecasts after the latest AUD declines. They remain fairly negative. Westpac expects the AUD to settle around 73 cents by the end of the year, a slight adjustment from their previous forecast of 74 cents.
Australian Dollar predictions
In 2018 the Australian dollar tumbled faster than expected, and all the banks dropped their year-end AUD forecasts to reflect a change in expectations.
Since the start of 2019, the Australian dollar has fallen below 70 cents to hit a 10-year low of 0.6871.
Updated in January 2019
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Will the Aussie Dollar go up?
The banks appear divided on where the AUD will be by the end of 2019. With the current AUD trading just slightly below CBA's, ANZ's and NAB's expectations, will the ‘Big 4' banks hold on to their current forecasts? Potentially.
Let's examine the 3 most likely reasons the Aussie will remain weak at current forecast levels:
- The US economy picks up, US political risks ease, and their central bank increases interest rates, supporting the USD
- The Australian economy falters and inflation only slowly and gradually picks up, decreasing the risk of interest rate hikes from the RBA
- China’s economic growth slows more than expected, lowering demand for our commodities (and our Aussie dollar)
Australian Dollar long term forecast
The major banks changed expectations for the AUD in 2018 and this has spilled over in 2019. Now the banks outlooks for 2019 are still negative, with most of them expecting a flat to lower trend by the end of the year.
- ANZ bank is just as negative in 2019, with the AUD expected to decline mid-year before rising to 70 cents by the end of the year.
- The most optimistic is CBA, with an expectation that the AUD will gradually rise towards 75 cents by the end of the year.
- In 2019, NAB is also expecting the AUD to gradually rise and end the year at 75 cents.
- Westpac expects the AUD to rise slightly to 73 cents by the end of 2019.
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General advice: The information on this site is of a general nature only. It does not take your specific needs or circumstances into consideration. You should look at your own personal situation and requirements before making any financial decisions.