Huge policy support paves way for strong recovery

Australia and New Zealand have had far greater success in containing the virus than most other large advanced economies. Coupled with huge fiscal support, that means that the recovery in economic activity could surprise to the upside next year. Central banks in both countries are set to ease policy further over the coming months, but this is now largely priced in. As such, we expect both the Australian dollar and the New Zealand dollar to recover further as risk appetite improves.