BofA Sees AUD/NZD Plummeting to 1.18 in Early 2027

Currency analysts at Bank of America (BofA) remain bearish on the Australian Dollar to New Zealand Dollar exchange rate, predicting it will fall to 1.18 in early 2027. The current AUD/NZD rate is around 1.20, but BofA believes the Reserve Bank of New Zealand (RBNZ) will continue to tighten monetary policy more aggressively than the Reserve Bank of Australia (RBA).

The RBNZ raised its Official Cash Rate to 2.50% in July and stated that further hikes are likely at upcoming meetings, with its next decision scheduled for September 2. BofA believes this will put downward pressure on the AUD/NZD rate.

However, some investors remain concerned about a potential Australian interest rate hike, which could support the Aussie dollar. The RBA's latest decision was described as 'deliberately hawkish' and there is still a risk of another insurance hike if inflation data surprises to the upside.