The NZD/USD pair continues to consolidate sideways in the mid-high 0.71s. Economists at Westpac forecast the kiwi at 0.75 by April as the USD should weaken further. In addition, the NZ economy’s performance since covid has been stronger than expected, providing fundamental support for NZD outperformance.
“We’re looking for an eventual break above 0.7250 to signal a larger upside break is in store.”
“Multi-month, we expect risk sentiment to remain elevated; supported by unprecedented global central bank and government stimulus, and vaccine development.”
“Medium-term, we remain bullish, targeting 0.7500 by April (that was the peak area between 2016 and 2018).”
“Key drivers are expected to be USD weakness and NZ economic growth outperformance.”