Nov 02 2022
VOT Research Desk
MUFG Bank analysts predict that the NZD/USD pair will reach 0.5600 by the end of the year and 0.5700 by the end of the first quarter of the following year.
They note that the increase in the Reserve Bank of New Zealand’s (RBNZ) terminal rate supports the New Zealand dollar, but they caution that short-term negative risks will persist. As the RBNZ continues to set the pace for the overall amount of monetary tightening, the New Zealand currency gained ground in October against both the US dollar and the Australian dollar.
Despite setting the bar for tighter policy, there was little sign that the shift in stance would be slowed.
That led to a revision in the terminal rate estimate in New Zealand. Given the possibility of a disruptive correction in the property market, there is unquestionably an increasing risk of the RBNZ going too far.
According to IMF data, New Zealand is more vulnerable than most other nations.
