FXStreet reports that economists at Westpac discuss NZD prospects.

“The New Zealand economy is outperforming most of its peers. And, reflecting this outperformance, the RBNZ is poised to lift the OCR in advance of other key central banks. As a result, interest rate differentials should provide a tailwind for the NZD, and we have upgraded our NZD forecast over coming quarters despite an initially lower starting point.”

“We expect that red hot commodity prices will continue to provide support to the NZD. The stronger outlook for the NZ economy has led us to upgrade our forecast for the NZD/AUD cross. Like the USD story, New Zealand is facing greater capacity pressures compared to Australia. Part of this has been our success in containing covid, which has supported a faster recovery in activity. The RBNZ is currently more hawkish than the RBA as it has already tightened some aspects of monetary policy, and is expected to increase interest rates in the next few reviews.”