Over the past five days, the New Zealand dollar is the second-best performing G10 currency after the Swiss franc. The guidance from the Reserve Bank of New Zealand (RBNZ) this week will be key. In the opinion of economists at Rabobank, the kiwi is vulnerable to lower rates.

The peak in RBNZ rates could be lower than previously expected

“If the RBNZ starts to signal the peak in rates is likely to be lower and come sooner, the NZD could be vulnerable.”

“Despite the improved tone of NZD/USD in recent sessions, we expect further upside may be difficult on a 1-to-3-month view.”

“We see the potential for further safe-haven demand to boost the USD in the month ahead. This view stems from concerns over the pace of global growth.”

“We see risk of another dip to the NZD/USD 0.63 area in the weeks ahead with a moderate recovery in the currency pair on a 6-month view dependent on a broad-based softening in the value of the USD.”