NZD/USD still projected at 0.70 by year-end

The NZD/USD remains stuck in a 0.6650-0.6950 trading range, which is expected to continue over coming months, according to analysts at BNZ. As the year progresses, they expect a more positive tone to the global economic backdrop to prevail – a factor which the NZD is sensitive to – supporting a move to 0.70 by year-end.

Key Quotes:

“Currency volatility is remarkably low and we haven’t had to change our NZD projections for the best past of five months now, seeing a 0.67-0.70 prevailing through the year.”

“Conflicting forces have kept the NZD range-bound. On the positive side, higher risk appetite and commodity prices are tailwinds and have driven our short-term fair value model estimate higher all year to about 0.69. But uncertainty about the global economic outlook remains a headwind. The RBNZ’s recent dovish pivot added some downside risk, but moderately to the extent that it followed a similar theme seen by other G10 central banks.”

“Our projections still have the NZD ending the year around 0.70, a little higher than the top of its trading range this year, as these more positive global forces predominate. By contrast, the case for a lower NZD would be if global economic momentum lurched downwards and/or the RBNZ cut rates by more than 50bps over coming quarters, against a backdrop of unchanged policy expectations for other central banks.”

“Exporters should consider continuing to look to increase cover near the bottom of the recent trading range around 0.67, while importers should take advantage of moves above 0.69. The 0.6950 mark remains a key level of resistance.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.