FXStreet reports that economists at Rabobank said that RBNZ Governor Orr could attempt to push against the perceived hawkishness of the RBNZ if the value of the NZD continues to appreciate.

“The RBNZ has made clear that any rate hike will be ‘conditional on the economic outlook’. Additionally, Governor Orr signalled a willingness to remain vague by commenting that ‘who knows where we will be by then’, in reference to Q3 2022.” 

“Clearly the direction of the pandemic and of the vaccine programme will be instrumental in dictating the outlook for the economy into next year and beyond, but it is likely that the RBNZ will also have one eye on the exchange rate. The RBNZ has previously been successful at knocking the value of NZD lower by announcing pre-emptive or larger than expected rate cuts. This suggests a strong focus on the NZD.” 

“In light of the hawkish outlook on rates by the RBNZ we have raised our 3-month forecast for NZD/USD very moderately from 0.72 to 0.73.”