Analysts at Rabobank said they expect AUD/NZD to rise to the 1.08 area on a six-month view.

Scope for NZD/USD to drop back in coming months

"The RBNZ is forecasting a temporary contraction of 1% in GDP in 2023. The view is that this is necessary to bring demand back in line with supply and to stamp inflation out of the system. This GDP forecast contrasts with that from the RBA which projects no recession."

"The optimism assessment is that a short downturn this will put the NZ domestic economy on a better path to sustainable growth over the medium-term with this year’s input from tourism already providing a solid base for export growth. That said, the outlook fares poorly in relation to Australia where the economy is likely to continue to draw protection from energy production (though its terms of trade fell back sharply in Q3, driving by weak iron ore prices)."

"We expect AUD/NZD to creep higher to 1.08 on a 6 month view. We see scope for NZD/USD to drop back in the coming months as global growth slows and demand for safe haven increases but look for NZD/USD to move higher again on a 6 to 9 month view."