Minna Kuusisto, Analyst at Danske Bank, suggests that they are keeping their forecast for NZD/USD unchanged as relative monetary policies and USD momentum should drive the pair lower on a 1-6M horizon.
“Broad-based USD weakness pulled NZD higher in January, which may have been one of the reasons forcing RBNZ to change its rhetoric at the February meeting. We consider the central bank’s commitment to accommodative monetary policy ‘for a considerable period’ to be a strong signal it will keep rates unchanged over our forecast horizon. USD appreciation momentum gained ground towards the end of February as we expected, as the market started pricing in a Fed March hike. NZD/USD returned to our 1M target level of 0.70.”
“In the course of H2, we expect the RBNZ to review its current dovish stance and market speculation about a possible hike in 2018 should support NZD on a 6-12M horizon.”