NZD: Year-end target raised to USD0.66 - BNZ

Jason Wong, Currency Strategist at BNZ, suggests that once again, BNZ is revising upward their NZD projections, with a year-end target of USD0.66 (previously 0.63).

Key Quotes

“The NZD was solid through June following weak US employment data and the Fed backing away from its previous intentions to tighten policy over coming months; the RBNZ’s obvious lack of desire to cut rates to drive inflation higher in the face of a strong housing market; and a run of solid domestic data, with the economy growing at a comfortable pace and inflation pressures no longer falling.

Over recent months our theme for the NZD has been “stronger-for-longer” but the strength of the NZD has still caught us by surprise. The NZD has traded near the top (and even beyond at one stage) the 0.67-0.72 range we saw in the short-term and that was assuming a “Remain” vote in the UK referendum.

Despite being wrong on the UK referendum vote, a negative-NZD outcome, we are putting through some forecast upgrades, with a year-end target of USD0.66 now (previously 0.63) and NZD/AUD at 0.94 (previously 0.91). Essentially it’s a level shift up to our previous profile, extending out to the end of 2018.”