In its latest client note, analysts at HSBC forecasts the US dollar rally to continue on the back of Fed’s interest rate outlook for this year.
Sees the USD rally continuing as the market sticks to its view that Fed won't deliver a tightening path laid out in the median dots.
That creates an asymmetric upside risk for the USD.
Equally important is the fact that the other G-10 central banks have delayed their own normalization processes.
The market has failed to anticipate a rally in the USD at the start of the year.
USD rally is also being supported by the ongoing reappraisal of an appropriate level of risk premium for emerging markets.
HSBC remains bullish on USD because valuations aren't stretched.
As for NZD/USD, the Q3 forecast revised downwards to 0.67 from 0.69 and Q4 forecast to 0.65 from 0.68 previously.
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 securities. 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 Forex 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.