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Expect big gains by the Australian and New Zealand dollars next year.
This is according to analysts at TD Securities, one of the world's biggest investment banks.
? "We continue to see 7-8% gains in Antipodean FX into next year on a stabler global growth outlook, risk-on sentiment and another value driven adjustment lower in the USD," says TD Securities in its 2026 strategy preview.
The call defies the consensus expectation which anticipates only modest AUD and NZD appreciation into 2026 as investors cut back on USD shorts.
New Zealand's dollar was a standout G10 underperformer in 2025, with particularly pronounced losses being recorded versus the major European currencies, including pound sterling.
The Kiwi proved more resilient against the dollar, although that was almost purely a function of the big USD selloff that we saw in the first half of the year.
Why will the New Zealand Dollar Top the Charts in 2026?
TD expects NZD "to recover strongly" from its 2025 lows as the Reserve Bank of New Zealand (RBNZ) will be done with its cutting cycle by the end of the year.
This expectation defies the current consensus amongst market players that sees even more cuts from the RBNZ into next year.
? "NZD is very under-owned and positioning is extremely light. Our high frequency and long term fair value models flag the NZD as cheap, and we expect market factors (equity, rates, and risk) to provide a tailwind to NZD strength in 2026," says TD Securities.
Where's the Trade? "Long AUDUSD and NZDUSD," says TD.