The June FOMC meeting triggered a sharp rally of the US dollar across the board. Analysts at Rabobank still see the NZD/USD pair at 0.73 in a three-month perspective.
Key Quotes:
“Up until yesterday the market consensus was pointing to a moderately softer value of the DXY dollar index over the course of the coming 2 quarters. The price activity in the USD crosses today suggests that a revaluation of positioning is currently taking place. Our existing forecasts for a stronger USD this summer were based on the view that the debate about inflation and Fed policy would heighten in the approach to the Fed’s Jackson Hole symposium. Our expectations for a stronger USD have meant that our forecasts for NZD/USD and AUD/USD have also been trailing the market consensus.”
“With the July RBNZ policy meeting in view we continue to see scope for moderate upside in NZD/USD and we retain a 3 month forecast of 0.73. The release of New Zealand Q2 CPI inflation is not due until July 15, one day after the RBNZ policy review.”
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