According to Jane Foley, Senior Currency Strategist at Rabobank, the RBNZ may be required to extend its dovish tone to maintain the pressure on NZD, further expecting NZD/USD to move towards 0.68 and AUD/USD to see 0.70 levels in the long term.
Key Quotes
“In our view the risks to growth justify the more dovish tone of the RBA. However, with RBNZ rates at 3.5% the carry trade still has the ability to thwart a broad based decline in the value of the NZD and the RBNZ may have to extent its dovish tone further if it wants to keep the currency under pressure.“
“Earlier this month the AUD/NZD hit a new low in the 1.0355 area sparking a round of talk that the exchange rate was heading to parity.”
“Speculation that the RBA could be cutting rates again in the coming weeks heightens the risk that the RBNZ could also be forced to cut rates and so protect New Zealand’s competitive position in the region.”
“In view of the change in the RBNZ tone last night and the Fed’s apparent lack of concern about the value of the USD, we have extended our bearish NZD/USD view and look for a move towards 0.68 on a 12 mth view.”
“We have also extended our bearish AUD/USD forecast to 0.70 on a 12 mth view.”
Key Quotes
“In our view the risks to growth justify the more dovish tone of the RBA. However, with RBNZ rates at 3.5% the carry trade still has the ability to thwart a broad based decline in the value of the NZD and the RBNZ may have to extent its dovish tone further if it wants to keep the currency under pressure.“
“Earlier this month the AUD/NZD hit a new low in the 1.0355 area sparking a round of talk that the exchange rate was heading to parity.”
“Speculation that the RBA could be cutting rates again in the coming weeks heightens the risk that the RBNZ could also be forced to cut rates and so protect New Zealand’s competitive position in the region.”
“In view of the change in the RBNZ tone last night and the Fed’s apparent lack of concern about the value of the USD, we have extended our bearish NZD/USD view and look for a move towards 0.68 on a 12 mth view.”
“We have also extended our bearish AUD/USD forecast to 0.70 on a 12 mth view.”
