FXPrimus’s special report helps traders a lot to improve their knowledge and get insight for the year 2018!

Outlook on Australia – AUSTRALLIAN DOLLAR

For most of 2017 Aussie improved gradually on RBA’s accommodative monetary policy with headline inflation easing to 1.80% YoY.

I expect RBA to maintain the same path to policy normalization at least for the first half of 2018 while I also expect some inflationary pressure for the same period in the wake of solid wage growth.

This being said, AUD/USD is likely to experience some slight downward pressure during the first and maybe second quarter of 2018 but nothing that could move price below 0.7360.

Despite Iron ore prices in China are pricey and the Chinese economics add some bearish bias, vulnerability is likely to subdue by year’s end amid a probable RBA hiking cycle starting between End Q2 – Beginning Q3 of 2018.

My view following this is that a long-term rally with first stop near 0.8400 is quite feasible.

Outlook on New Zealand – NEW ZEALANDIAN DOLLAR

Amongst the commodity currencies, Kiwi also performed well for most of 2017 taking advantage of Oil prices, however, with RBNZ Governor Wheeler stepping down and the raise of the National party in Q3, NZD/USD weakened near January 2017 lows.

In addition, Oil’s effects on Kiwi were not as great as Aussie or loonie.

At the same time, it’s worth mentioning that New Zealand saw a building boom which adds to increasing labour supply and lifting low wages up, as well as that NZ is top output performer between G10 countries.

Taking into account weighing Yields surrounding carry trades and picked inflation expectations I believe that prices will move higher towards 0.7560 and higher.

This, assumes RBNZ raises interest rates in Q1-Q2 2018.