The dollars of Australia, New Zealand and Canada have been three of the worst-performing major currencies so far this year. Despite the fact that they have already fallen a long way, we expect them to weaken further. This is largely due to the adverse effect on economic activity that we foresee from prior falls in the prices of commodities, of which each country is a major exporter. This is likely to require monetary policy becoming looser than many expect, just as it is becoming tighter in the US.
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