NZD/USD: Vulnerable to some correction before more sustained gains – MUFG
|The Kiwi strengthened sharply in November, by a large 7.2%. Economists at MUFG Bank expect the NZD/USD pair to correct lower before staging a sustained recovery.
NZD encouraged by hawkish repricing of RBNZ rate hike expectations
“The RBNZ rate hike of 75 bps was partially priced but the key takeaway was the substantial upward revision by the RBNZ to the estimated terminal rate – from 4.10% previously in August to 5.50%.”
“NZD was also propelled higher by the gradual shift away from zero-covid policies in China that are encouraging more optimism over growth next year.”
“With the Fed still set to hike further and remain hawkish, we see the NZD correcting weaker before gaining again.”
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