The New Zealand dollar has continued to be volatile, initially falling after the return of covid restrictions. However, the underlying economy remains strong. Economists at Westpac expect the NZD to appreciate against the USD due to it being undervalued for some time based on fundamentals. 

NZD to continue benefitting from high commodity prices

“We expect the NZD to gain ground against the US dollar over the next year, reaching an average of 0.74 by the end of 2022.”

“Our assessment is that the NZD is undervalued, and indeed has been for some time. Indeed, relatively high-interest rates and record-high commodity prices both argue for a stronger NZD.”

“On balance, we expect the NZD/AUD exchange rate to hold broadly steady over the coming year.”