NZD Corporate FX Update
The NZD remains out of favour, with a clear downward trajectory evident throughout the second half of the year. We attribute much of this decline to domestic factors, particularly the elusive NZ economic recovery and the prolonged monetary policy easing cycle.
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Wings clipped on Kiwi
Global and domestic forces have driven the NZD down to fresh lows, demanding a revision to our projections. We pare back the extent of projected US dollar decline against all the majors, while NZD crosses include the impact of the now well-acknowledged disappointing recent NZ macro performance.
Our new year-end target for NZD/USD is 0.59. From a current depressed level, we still see a clear pathway for a positive medium-term trajectory, although next year’s target has been cut to 0.63.
Full Currency Research is available to BNZ Wholesale clients upon request, please email bnz_research@bnz.co.nz to subscribe.