NZD/USD: US Dollar softening can take Kiwi to 0.65 by year-end – ING

FXStreet Insights Team FXStreet

The Reserve Bank of New Zealand defied hawkish expectations at the May meeting. Economists at ING discuss RBNZ's policy outlook and share their forecasts for the NZD.

RBNZ might not be done after all

The latest round of tightening (Australia, Canada) and the risk of the RBNZ having underestimated inflationary risks mean another hike or even two by year-end cannot be excluded.

The room for a hawkish repricing is quite large (only 10 bps of tightening is in the price for now) but NZD can also be hit by more domestic tail risks – mostly related to the real estate market – than AUD, so we don’t see a strong bearish case for AUD/NZD.

USD softening can take NZD to 0.65 by year-end.

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FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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