New Zealand Dollar (NZD) Exchange Rate: ‘Kiwi’ Could Achieve 88 US Cents
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Although the ‘Kiwi’ has edged lower against peers like the ‘Greenback’ in response to concerns that the currency’s strength has been excessive, and may continue to weaken in the near future, CMC Markets believe the New Zealand Dollar may push higher in the medium term.
A CMC Markets analyst was quoted by Bloomberg as stating; ‘More tightening should support the Kiwi Dollar, but given the recent strength, it might be due for some near-term correction. The 84 US cent level was a key resistance level for at least six months. That will now turn support.’
Overnight the NZD/USD exchange rate was trading close to an 11-month high as the New Zealand Dollar continued to derive underlying support from the Reserve Bank of New Zealand’s decision to increase interest rates.
During European trading the ‘Kiwi’ softened against the British Pound as the Sterling was moderately boosted by UK employment figures and minutes from the Bank of England’s latest policy meeting.
With the US Federal Open Market Committee policy announcement taking place later today, the New Zealand Dollar could slip against its US counterpart if the central bank continues with its plan to gradually taper stimulus.
However, any declines could be swiftly reversed if New Zealand’s growth report surprises to the upside.
Economists have forecast that the growth figures will show that New Zealand’s economy expanded by 0.9 per cent in the fourth quarter (quarter-on-quarter) following growth of 1.4 per cent in the previous three months.
On the year the nation’s economy is expected to have grown by 3.1 per cent.
Before the weekend additional New Zealand Dollar movement could be triggered by New Zealand’s credit card spending figures.
The New Zealand Dollar is currently trading against the Pound in the region of 0.5178 and is trading against the US Dollar in the region of 0.8612