NZD/USD stays on the back foot and declines toward 0.6200. Nevertheless, economists at ING expect the pair to bounce back higher toward the 0.67-68 zone in the second half of the year.
NZD strength relies on external factors
“Our bullish view on NZD/USD for the remainder of the year is primarily a function of global factors: improved risk sentiment, positive exposure to the China reopening story, a benign USD decline.”
“We target 0.67-0.68 in the second half of 2023.”
See: NZD/USD to advance nicely over the course of the year – ANZ
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Read More
ING, one of the leading global banks, has outlined its forecast for the New Zealand Dollar’s exchange rate with the US Dollar (NZD/USD) throughout 2023. Taking into consideration current macroeconomic developments, movement in the risk appetite landscape and likely a continuation of accommodative monetary policy from central banks, ING suggests that the NZD/USD rate is set to reach a range of 0.67 to 0.68 in the second half of the year.
Recently released economic data shows that the New Zealand economy continues to recover proceeding the coronavirus pandemic. Several second quarter indicators, such as GDP, industrial production and trade flows, show an upward trend supported by domestic and international demand. Supported by signals of a strengthening economy, the New Zealand Dollar has maintained buying pressure and at the same time new Zealand’s Treasury has recently upgraded its economic forecasts – all of this leading ING to declare it as a “compelling buy”.
Given the outlook, ING also warned that the NZD/USD rate could fall as low as 0.62 in the early parts of 2023 only to recover to a range of 0.67 to 0.68 by the end of the year. This suggests the magnitude of the downside risks required for such a depreciation have yet to materialize.
With a continuation of this positive momentum in fundamental and macroeconomic developments, ING believes the NZD will continue to gain strength as we move into the second half of the year, when the expected value of the NZD/USD could reach 0.67 to 0.68.
It is also worth noting that economic uncertainty could prove difficult to navigate, with the final outcomes of Brexit, trade tensions between the US and China and the future of the International Monetary Fund’s debt service freeze all contributing to the potential directional bias of the NZD.
Overall, the outlook for the NZD/USD rate is looking more positive, with ING expecting the exchange rate to appreciate against the US Dollar throughout the year.
