NZD/USD to fall below 0.70 over the next 3-6M – Danske Bank

Research Team at Danske Bank suggests that the NZD has depreciated faster than their expectations as a result of the more hawkish tone from the Fed.

Key Quotes

“We expect sustained USD momentum in the first months of 2017 and see relative rates as the main driver for lower NZD in coming months. However, we do not expect NZD to collapse as a pickup in global growth will provide support for commodity prices and thus NZD. We expect NZD/USD to fall below 0.70 over the next 3-6M as markets adjust for upcoming Fed hikes. In the longer term, we expect USD rally to lose steam and, thus, expect NZD/USD to bottom in the 0.68-0.70 range. Our forecasts are0.70in 1M, 0.69in 3M, 0.68in 6M and 0.70 in 12M.”