The New Zealand dollar depreciated past 0.6760 on Friday, hitting a new 1-year low and falling for a fifth straight week. The Kiwi has been losing ground amid a series of hawkish signals from the Federal Reserve, exacerbated by risk-off trades in the currency markets driven by fears around the Omicron variant. A growing number of Fed officials have thrown their support behind normalizing policies and setting the stage for hiking rates in order to combat inflation. Meanwhile, the Reserve Bank of New Zealand raised the Official Cash Rate by 25 basis points to 0.75% in its last meeting, in line with expectations but fell short of market speculations for a more aggressive 50 bps hike that analysts believed would be more supportive of the currency. RBNZ chief economist Yuong Ha also said recently that the new Omicron variant is unlikely to alter the central bank’s rate hike plans due to the new Covid protection framework.
Historically, the New Zealand Dollar reached an all time high of 1.49 in October of 1973. New Zealand Dollar - data, forecasts, historical chart - was last updated on December of 2021.
The New Zealand Dollar is expected to trade at 0.67 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 0.65 in 12 months time.