Analysts at Australia and New Zealand Banking Group (ANZ) have revised up their forecasts for the Kiwi dollar, in light of the recent streak of upbeat New Zealand’s fundamentals and government’s fiscal stimulus.
“For the Kiwi dollar, the facts have changed rather quickly in the last couple of weeks, challenging our high conviction call of NZD weakness.
Little has changed from a top-down perspective, however better data, a possible fiscal injection, and a more muted capital ask from the RBNZ have removed the catalysts we saw for near term weakness.
As such we are revising our forecasts and taking out much of the weakness that we had previously anticipated in the NZD. This will have the biggest impact on our near-term bias for the AUD/NZD cross, and for how we think about the NZD/JPY in a better risk environment.”