What are NZD to USD forecasts?
According to recent forecasts from FX analysts, the New Zealand dollar (NZD) may continue to face limited gains against the US dollar (USD) due to mixed economic data. Although the NZD found some support at the end of last week as risk appetite improved, its gains were limited as May’s consumer confidence figures undermined the currency's potential. The Kiwi's morale edged marginally lower amid persistent inflationary pressures, which could continue to affect market sentiment towards the currency.
Meanwhile, the US dollar has recently rallied following an uptick in the core PCE price index, which is the Federal Reserve's preferred measure of inflation. This prompted fresh Fed rate hike bets, which strengthened the USD. However, a forecasted drop in consumer confidence later tonight could potentially pull the USD lower. Economists expect the US dollar's strength over the past year to eventually reverse in 2023 as the Fed's interest rate hikes cycle comes to an end.
Overall, the NZD/USD exchange rate has traded in a quite stable 5.3% range from 0.6046 to 0.6366 over the past three months. While the NZD and AUD are often correlated and move in the same direction due to their geographical proximity and their dependence on commodity markets, the NZD to USD exchange rate may face limited gains in the short term due to mixed economic data and persistent inflationary pressures.