BNZ (in summary)
- We remain cautious on the near-term outlook for the NZD as we head towards, and into, 2022.
- The year is closing with still-strong USD momentum, the big dollar in a clear uptrend since the US Fed’s initial hawkish pivot at the June FOMC.
- As we look to 2022, it is difficult to have conviction that the USD is at a turning point, and our near-term NZD projections are nudged a little lower, reflecting our broadly-based upward revision to the USD.
- We have pitched our Q1 and Q2 targets at 0.68-0.69, consistent with a view that sustained USD strength will see the NZD languish roughly in a 0.66-0.71 range over the first half of next year. Our assumption thereafter is that the USD might finally be on the turn by that point, easing the path for the NZD to return into the low 0.70s.
