I can smell it like a freshly baked batch of chocolate chip cookies. 2013 is almost here! But before you welcome the New Year, be sure to read up on my predictions for the comdolls!
AUD: More easing from the RBA?
After delivering four rate cuts in 2012, market junkies think that we will see the RBA continue its rate-cutting ways in 2013. Heck, there are even those who warn that we could see the central bank's official cash rate go down by as much as 0.75%!
It's not much of a surprise to see why a lot of people are bracing for further easing. After all, RBA Governor Glenn Stevens did say that the labor market is softening with iron ore and coal companies cutting jobs. Analysts over at one of the most renowned banks in Australia, Westpac, also predict that economic growth for 2013 will be lower at 2.75% than the 3.0% growth for this year.
But of course, as with everything else in life, nothing is set in stone. The RBA might have said that the latest rate cut was appropriate for the time being, but we could see the central bank take on a more hawkish stance should economic growth pick up once again.
CAD: The BOC without Carney
In case you missed it, BOC Governor Mark Carney is now just finishing his job at the BOC and is getting ready to replace Mervyn King as the BOE's head honcho. With it, some say the absence of his hawkish disposition could be bearish for the Loonie in the coming year.
However, there are those who argue that it shouldn't be much of a big deal. The BOC has always taken on a single script in all its rate statements, hiding much (if not all) of an official's bias.
Instead, these analysts say that we ought to pay more attention to Canada's household debt. Remember that in October, part of the reason why the BOC hiked rates was the high level of debt among consumers which already made up 163.3% in Q2 2012 of total income. There are speculations that the growing level, which stood at 164.4% in Q3, may just push the central bank to raise borrowing costs in order to curb borrowing.
NZD: RBNZ to tighten monetary policy?
Word through the forex grapevine is that 2013 could be the year of the Kiwi as market junkies are predicting that the RBNZ will hike rates as soon as New Zealand's economic rebound gains momentum. For them, strong growth forecasts for New Zealand's trade partners could contribute a lot to export demand and overall economic growth.
Besides, the RBNZ seemed pretty confident about New Zealand's economic prospects as RBNZ head Graeme Wheeler highlighted the improvement in their domestic industries. However, he also pointed out that central bank officials are watching inflation very closely and that they'll probably wait for their annual CPI to reach their targets before adjusting monetary policy.
The Role of China and the PBoC
It can't be denied that Chinese economic data had a strong impact on comdoll price action over the past year and will most likely continue to do so in 2013. Almost everyone has high hopes for the world's second largest economy next year as recent economic indicators hinted at a pickup in growth.
For one thing, China's manufacturing PMI keeps printing one improvement after another as the HSBC-measured figure reached a 14-month high in December. Even the World Bank itself agrees that China is poised to take off as it raised the 2013 growth forecast from 8.1% to 8.4%.
Overall, it appears that 2013 will be a very interesting year for the commodity currencies as we have pinpointed various factors that could drive their price action. Which among the Aussie, Loonie, and Kiwi do you think will be the strongest performing commodity currency for next year? Let us know by voting through the poll below!
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