Key New Zealand Dollar exchange rate forecasts including NZD/USD, GBP/NZD, EUR/NZD and NZD/AUD.
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The New Zealand Dollar looks vulnerable over coming days according to New Zealand lender ANZ in a weekly foreign exchange forecast update.
Analysts at the bank say the key driver for the New Zealand currency will likely remain global investor confidence, which leaves it at risks to further declines, particularly against the Dollar.
However, against the likes of the Pound and other currencies the near-term outlook is more nuanced.
"A wobbly start to the week for the Kiwi and risk appetite in general as we head into this holiday-shortened week. Oil prices and RBNZ policy rate expectations have faded, but that all pales in comparison to the massive swings seen in US rates, and NZD price action this week is likely to also be mainly driven by the offshore vibe, which is anything but robust," says analyst Brian Martin at ANZ.
Global markets continue to struggle amidst an environment of elevated energy prices and rising central bank interest rates, particularly at the world's most systemically important central bank, the Federal Reserve.
The Fed is engaged in a series of rapid and outsized hikes - the most recent coming last week - which is raising the cost of borrowing in the U.S. and globally, while also draining liquidity from the global financial system.
This leaves the pro-growth New Zealand Dollar at risk of underperformance.
Technical analysis from ANZ shows support for NZD/USD is likely to be found at 0.6100 and then 0.5940, resistance is meanwhile seen at 0.6395 and then 0.6575.
Above: NZD/USD daily chart showing key levels from ANZ Research.
Against the British Pound the New Zealand Dollar is meanwhile forecast to maintain a tight range, which if correct, minimises any risk in either direction for those watching this exchange rate over coming days.
This is largely because both sides of the Pound to New Zealand Dollar exchange rate are deemed by ANZ to be susceptible to the U.S. Dollar to the same degree, meaning GBP/USD and NZD/USD would likely see similar moves as the Dollar dominates global FX.
This effectively cancels out any significant moves on the cross rate that is GBP/NZD.
"USD impact on both legs cancelled out on this cross. No obvious catalyst in sight for a significant break-out," says Martin.
For NZD/GBP support is seen at 0.4870, 0.4980 and 0.5050, resistance is meanwhile located at 0.5230 and then 0.5345.
For GBP/NZD this translates into support at 1.9120 and 1.87. Resistance is then seen at 1.98, 2.00 and 2.0534. (Set your FX rate alert here).
Above: GBP/NZD daily chart showing key levels from ANZ Research. The GBP/NZD is approximated by Pound Sterling Live from the stated NZD/GBP values provided.
The New Zealand Dollar's prospects against the Australian Dollar however look more interesting, as Martin explains:
"NZD/AUD Has rallied towards 0.91, the key level it broke below on the way down. Australia’s economy looks in better shape than NZ’s, and that speaks to weakness, but markets aren’t trading that and it could be short-covering of a consensus trade behind the recent rally. Let’s see."
Support for this pair is located at 0.8856 and 0.8950, resistance is at 0.9185 and then 0.9300.
Against the Euro, the New Zealand Dollar is expected by ANZ to be "stable around 0.60".
"ECB’s new anti-fragmentation tool will allow it to hike without restraint; that could be very EUR positive," says Martin.
Support for the pair is located at 0.5755 and then 0.5910, resistance is seen at 0.6260/0.6415.
For those watching the Euro to New Zealand Dollar equation, this translates into resistance at 1.6920 and 1.7376. Support is meanwhile at 1.5588 and 1.5974.
Above: EUR/NZD daily chart with key levels from ANZ Research. The EUR/NZD is approximated by Pound Sterling Live from the stated NZD/EUR values provided.