FXStreet reports that economists at CIBC Capital Markets believe that the New Zealand dollar is underpinned as the RBNZ is set to continue its monetary policy normalisation.
“With the RBNZ to hike again this month and continue that process next year, and the cash rate expected to reach 1.50% from the current 0.50%, we expect rate differential support for the NZD to show via appreciation on a number of crosses.”
“We recommend being buyers of weakness in NZD vs AUD, EUR and JPY. Key driver for moves will be the divergence in monetary policy, both actual and outlooks. We also highlight moderate support for NZD/USD down to 0.7000, which was the area of previous highs. More major support will be found ahead of 0.6800-0.6850.”