Snippet from KiwiBank on the NZD. Analysts there have forecast
- NZD/USD to 0.67 by the end of 2022, down from 0.71
- & 71c to mid-2023
Citing, in summary:
Kiwi currency is driven by:
- Global sentiment is fragile, with talk of recession in the US and Europe. And China’s growth has disappointed. Risk appetite may be an impediment for the Kiwi dollar. Ultimately, we expect the “safe haven” flow into USDs too reverse into 2023. Assertive Fed tightening will have a material impact on consumption and investment. We also expect Chinese growth to improve into 2023 with further stimulus and a bounce back in activity from recent Covid related lockdowns
- Global commodity prices are easing. Falling commodity prices will weigh on the Kiwi dollar. But we expect Kiwi (soft) commodity prices to hold relatively well. Our terms of trade remains well above longer term averages.
- Interest rate differentials are likely to support the Kiwi dollar into 2023. We believe the slowdown in the US, and Europe, will be worse than the slowdown in New Zealand. A recession in the northern hemisphere would see interest rates fall faster and deeper than interest rates in New Zealand and Australia.
