The AUD and NZD have traded in a relatively orderly fashion thus far, despite panic in other markets. For now, this will remain the case, however, the distribution around that forecast is heavily skewed to the downside, analysts at ANZ Research inform.

Our central forecast that both the AUD and NZD are closing in on their lows remains intact for now. Positioning in both remains relatively short, neither rallied as substantially as stocks or credit; and risk appetite, on our measures, have already moved to panic and close to levels consistent with prior large global shocks.

Absent a more substantial financial shock, these levels should hold, but the current degree of uncertainty makes it prudent to think about where the AUD and NZD may fall should that occur.

Levels for the AUD around $0.58 look possible and for the NZD levels of about $0.55. On the flipside, should the virus become contained in the near term and global growth return to normal levels in the second quarter (a V-shaped recovery), we think that targets for the AUD around our previous forecast of $0.69 and for the NZD of $0.65 remain appropriate.

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Oceania: AUD and NZD skewed to the downside ANZ - FXStreet