Latest New Zealand dollar outlook and forecasts from Westpack Institutional Bank
Before we consider the outlook for The New Zealand dollar (Currency:NZD) we take a quick look at the latest wholesale market rates and see the NZD is in consolidation mode on Monday morning in London:
- The British Pound versus New Zealand dollar exchange rate is 0.09 pct higher than seen on Friday's close at 1.9054.
- The Euro versus New Zealand dollar exchange rate is 0.12 pct higher on a daily basis at 1.6453.
- The Australian dollar versus New Zealand dollar is 0.08 pct lower at 1.1456.
- The New Zealand dollar versus US dollar exchange rate is 0.09 pct lower at 0.8075.
NB: The above quotes are taken from the wholesale spot markets to which your bank will add their own discretionary spread. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here.
Below, Westpac Institutional Bank consider the latest technical forecasts for the New Zealand dollar against a number of G10 majors:
New Zealand dollar / British pound sterling forecast
For NZD/GBP the one-month long consolidation persists with Westpac targeting 0.5300 this week:
The economic data flow in the UK recently has been positive, but if the BOE sets thresholds for employment and inflation, there is scope for further easing, weakening the GBP.
The UK calendar highlight is the BOE meeting (Thu). Of interest will be whether Governor Carney talks down market interest rates again.
New Zealand Dollar / Euro exchange rate outlook
For NZD/EUR:
"The one-month long consolidation persists, continuing to target 0.6160 next.
"The economic data flow in Europe recently has been positive, but we don’t expect it to outperform NZ’s over the long run.
"The European calendar’s highlight is the ECB meeting (Thu), likely to keep rates on hold given improved PMI survey data and some undeniably encouraging signs in this week’s Q3 ECB bank lending standards survey. Draghi might struggle to contain himself (not for the first time) at the press conference. Final July EZ PMI’s are on due Friday."
New Zealand dollar versus Australian dollar
NZD/AUD:
"The uptrend since March remains intact. We target 0.8800+ this week, an RBA cut on the cards next week.
"This trend is likely to remain intact for some time, the RBNZ will start hiking next year from 2.50% whereas the RBA will still be easing to 2.00%.
The Australian calendar is quiet through Tue when we see Jun building approvals for an update on the keenly hoped for recovery in residential construction. June private credit is also due Tue. Also on Tue is RBA Governor Stevens’ speech.
"He should discuss the economy but probably not drop any strong hints on the Aug policy decision. On Thu it’s Q2 terms of trade
and other minor June data."
New Zealand dollar versus US dollar forecast
NZD/USD:
"Upward momentum remains strong, pointing to a test of the June peak of 0.8137 this week.
"Fed tapering fears are likely to recede further this week - US data surprises continue to be negative, this week’s US GDP report has downside risks, and the FOMC may characterise the data flow as mixed - pushing the US dollar lower, and in turn, NZD/USD higher.
"In addition, the RBNZ’s hawkish shift in stance last week should underpin NZ interest rates. Also, speculative NZD/USD futures positioning is short and therefore vulnerable to a short squeeze.
"Technical momentum remains positive and targets the 0.8135-0.8300 area. Price action during this month-old rally looks corrective, suggesting a resumption of the downtrend to the low 0.70’s by year end is likely."