FXStreet reports that economists at ANZ Bank discuss NZD/USD prospects.
“While we are not forecasting a higher cash rate anytime soon, we do think that in a reflating world, markets are more likely to price policy tightening faster in New Zealand than they do elsewhere.”
“There is room for further upside in the NZD as the global backdrop continues to be supportive of pro-cyclical assets. We think a relatively higher rate structure, booming agricultural commodity prices and a strong domestic economy are NZD-positive. We forecasts NZD/USD to surge higher towards 0.74 by end-2021”.
“The key risk to the outlook is a rapid change in global financial conditions. If rising yields generate sustained damage in equity markets, the NZD will be one of the biggest casualties in the G10 FX market.”
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