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23 Feb 2015
NZD/USD could grind lower in H1 – Danske Bank
FXStreet (Edinburgh) - Christin Tuxen, Senior Analyst at Danske Bank, expects the lift-off in rates by the Fed to keep the pair subdued during the first half of the year.
Key Quotes
“With inflation at the lower bound of RBNZ’s 1-3% medium-term inflation target, the RBNZ has time to wait and see before rate hikes come on the agenda”.
“The low inflationary pressure and the maintained loan-to-value restriction on banks also mean that the RBNZ can await the full effect on the economy from the commodity price falls and past rate hikes”.
“We therefore still expect the RBNZ to remain in a period of monitoring and assessment before moving on rates”.
“With the Fed set to invoke on policy normalisation and hike rates mid year, NZD/USD should be in for another leg lower in H1. Further out downside will be limited by an RBNZ keen to continue its hiking cycle”.
Key Quotes
“With inflation at the lower bound of RBNZ’s 1-3% medium-term inflation target, the RBNZ has time to wait and see before rate hikes come on the agenda”.
“The low inflationary pressure and the maintained loan-to-value restriction on banks also mean that the RBNZ can await the full effect on the economy from the commodity price falls and past rate hikes”.
“We therefore still expect the RBNZ to remain in a period of monitoring and assessment before moving on rates”.
“With the Fed set to invoke on policy normalisation and hike rates mid year, NZD/USD should be in for another leg lower in H1. Further out downside will be limited by an RBNZ keen to continue its hiking cycle”.