NZD/USD to decline during the rest of the year - Lloyds  Bank

According to analysts from Lloyds Bank the NZD/USD  pair will decline during the next months and will end the year near 0.65.

Key Quotes:

“NZD/USD has spent the recent weeks oscillating between 0.69 and 0.74 in response to shifting policy expectations around the Reserve Bank of New Zealand (RBNZ) and US Federal Reserve. For now, economic data from New Zealand have shown little sign of improvement. Two year inflation expectations are anchored near all-time lows at 1.65%.” 

“Meanwhile, earings growth in Q2 was muted, diary prices (a key export market) remain under pressure and business confidence is subdued. Similarly, the outlook for global demand has weighed on the external outlook.”

“As a result, the RBNZ is likely to retain an easing bias for monetary policy over the coming quarters. At the same time, we expect the US Fed to raise interest rates in December, earlier than the market is predicting. Our view on US interest rates is strengthened by the latest labour market data. Given policy divergence implications, we anticipate NZD/USD declining through the rest of the year, towards 0.65.”