NZD/USD seen grinding lower to 0.69 in 12-month – Danske Bank

Analyst at Danske Bank Minna Kuusisto expects NZD/USD to head towards the 0.6900 area in a year’s time.

Key Quotes

“The NZD has depreciated faster than we expected. Approaching the oversold territory, we expect to see a temporary move higher in NZD/USD as the RBNZ cut in November is fully priced in”.

“We are relatively positive on EM and expect a gradual recovery in commodity prices. Attractive carry has supported the NZD during the era of global monetary easing, causing further downward pressure on inflation”.

“We expect monetary policy divergence to remain the main driver for NZD/USD and see the pair drifting down to 0.69 next year as the Fed resumes its hiking cycle and RBNZ keeps its cautious tone”.

“We expect a temporary correction in NZD/USD to 0.72 in 1M as the market has already fully priced in a November rate cut. For 3M, 6M and 12M, we keep our forecasts unchanged at 0.72, 0.70 and 0.69, respectively”.