Economists at Westpac have upgraded their  US dollar outlook to reflect recent data surprises, which in turn should bring forward Fed rate hikes to mid-2022 and boost the USD. NZD/USD should weaken as a result.

NZD/USD set to reach 0.72 in late 2023

“With a strengthening in the outlooks for US inflation and monetary policy, and the RBNZ adopting a more measured stance than some in markets had expected, we’ve revised down our forecast for the NZD/USD.”

“We now expect that the kiwi will drop to 0.66 by June next year. Further ahead, we expect the NZD/USD will take flight again as the OCR pushes higher, with the NZD/USD set to reach 0.72 in late 2023.”