Our new forecasts and the RBA’s trade war fears

After revamping all our forecasts, we have concluded that the RBA and the RBNZ probably won’t raise interest rates until late in 2020 and late in 2021 respectively. That explains why we now expect the Australian dollar to weaken to US$0.65 next year and the New Zealand dollar to decline to US$0.60. And when it comes to the impact on Australia from the global trade war, we appear to be more optimistic than the RBA.