NZD/USD is trading at its lowest level in nearly two years at around mid-0.6200. The near term outlook remains bearish, with potential to reach 0.6230 and possibly 0.6100, economists at Westpac report.

RBNZ inflation expectations survey shows some sign of slowing

“NZD/USD’s downward correction since early April can extend further, the USD remaining supported by the Fed’s tightening cycle as well as broad-based risk-aversion. The next technical target is 0.6230, with 0.6100 a possibility. 

“Today’s RBNZ inflation expectation survey for Q2 revealed some slowing in some indicators. Notably, the 2yr-ahead measure remained unchanged, as did the 10yr-ahead measure, suggesting expectations may be at or near a peak.”

“Multi-month, we retain a bullish outlook, targeting 0.7000 by year end. Fed pricing should start to stabilise in the latter part of this year, and NZ commodities are expected to become a major driver of the NZD.”