NZD - Recent Performance
It was a game of two halves for the New Zealand dollar in 2017. The currency gained more than 9% against the US dollar by late July, climbing to rates above 0.755, but had given back 80% of those gains approaching year-end, at rates close to 0.705. The New Zealand dollar struggled in the second half of the year as central banks around the world became far more hawkish than the RBNZ. The result of October’s general election – a win for the Jacinda Ardern led Labour party – also weighed on the “kiwi” later in the year.
ABN Amro are, overall, predicting a relatively stable 2018 for NZD as the RBNZ moves slowly towards monetary tightening, although the Dutch bank’s analysts are expecting the currency to continue to underperform slightly against the currencies of important trading partners.
ABN sees NZD/USD falling in the coming year to 0.675. For NZD/AUD and NZD/EUR, ABN expects 2018 year-end rates of 0.9 and 0.587 respectively, from rates in December ’17 close to 0.91 and 0.595.