NZD/USD could drop towards 0.6100 over three months – Rabobank

Analysts at Rabobank lean bearish on the NZD/USD pair in the short to medium term, predicting the US dollar to continue drawing safe-haven demand.

Key quotes

“FX volatility has been heightened in recent months and we expect this to continue. “

“We expect the USD to remain well bid on the back of safe haven demand despite speculation that the market may have over-estimated the extent of Fed policy tightening in the coming months.”

“In our view, USD strength is likely to push NZD/USD back towards its recent lows in the 0.61 area on a 1-to-3-month view.”

“We expect USD strength to turn around on a 6-month view allowing NZD/USD to recover to the 0.64 region.”

“We see scope for AUD/NZD to trend higher to 1.12 in the coming months.”