The NZD/USD pair consolidates after the recent post-RBNZ meeting decline. Economists at OCBC Bank analyze the outlook for the pair.
The Kiwi may still be unwinding some of its long positions
For now, rates are likely to remain at a restrictive level for an extended period to meet the inflation target.
Some Kiwi long positions may still be unwinding, but after the facelift, the New Zealand dollar remains attractive given the attractiveness of the yield, with the RBNZ likely to be one of the last DM central banks to cut rates.
Some degree of policy divergence with the Fed is possible in the second half of 2024 and the eventual stabilization of the Chinese economy should also support the NZD.
Source: Fx Street

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