NZD/USD to bounce towards 0.69 by year-end after a slide to 0.67 – Westpac

Commodity prices remain supportive for the kiwi, but stagflations risks and the looming FOMC meeting are offsets. Post-FOMC, economists at Westpac see scope for slippage towards 0.67. But multi-month, they are bullish, targeting 0.69+ by year-end.

Scope for slippage towards 0.67 in the near-term

“Since the Ukraine war started, commodities have accelerated higher, boosting commodity currencies such as the NZD. Yield spreads are also supportive, given the hawkish RBNZ.” 

“There are near-term risks around the March FOMC which could boost the USD and push NZD/USD down to 0.67. But beyond that, we expect a rebound into year-end, to 0.69+.”