Kiwi’s month-old downward correction could extend to 0.6375 on strong USD. Nonetheless, NZD/USD should see a rebound above 0.70 in the second half of the year, economists at Westpac report.

NZD/USD to rise in H2 on strong commodities 

“NZD/USD’s downward correction in April may extend further if the USD remains supported by the Fed’s tightening cycle. The next technical target is 0.6375. 

“NZ-US yield spreads are unlikely to be supportive until later this year, with RBNZ pricing far more overshooting than is Fed pricing.” 

“Multi-month, we retain a bullish outlook, targeting 0.70 during H2. Fed pricing may start to stabilise in the latter part of this year, and NZ commodities are expected to become a major driver of the NZD.”