The New Zealand dollar held below $0.62, hovering its lowest levels in over two years, as commodity currencies came under pressure from the Federal Reserve’s aggressive tightening plans and an escalating risk of a global recession. Recent data also showed 63% of businesses in New Zealand expect economic conditions to deteriorate over the coming year due mainly to supply disruptions and surging cost pressures, highlighting risks to the country’s economic trajectory. This presents a challenge to the Reserve Bank of New Zealand which is expected to stick to its aggressive tightening path to bring down inflation, even if it means risking a recession. Markets are priced for another hike of 50 basis points in July to take rates to 2.50%, and for rates to near 4% by the end of the year.
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 July of 2022.
The New Zealand Dollar is expected to trade at 0.61 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 0.58 in 12 months time.