NZD/USD has had an impressive run over the past week but 0.6800 is an obstacle for now. Nonetheless, economists at Westpac expect the kiwi to break the aforementioned 0.68 barrier in the coming months.
Key quotes
“The US dollar’s recent rebound is the main headwind near-term, but we remain bullish NZD/USD multi-week and multi-month.”
“RBNZ Governor Orr appeared unconcerned about the high NZD this week, indicating the RBNZ does not believe it is significantly overvalued. At the same time, he reiterated the next set of tools to be deployed would be a negative OCR combined with low-cost bank loans. NZ yields continue to fall, but that doesn’t seem to have weighed much on the NZD.”
“The NZ economy is expected to outperform the US economy during the year ahead. Moreover, we expect the weak USD trend to persist. We forecast NZD/USD to exceed 0.6800 during the months ahead.”
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