Kiwi’s corrective decline should slow by 0.7000, and give way to a multi-month rally past 0.7465, in the opinion of economists at westpac. Furthermore, NZ yield spreads and commodities will remain supportive.

NZD/USD appears well on track to reach the 0.7465 high by year-end

“There’s potential for NZD/USD to correct even lower during the next few days, to 0.7000 (which would be a 62% retracement of the October rally). At that level we’d be tempted to go long, with a multi-month horizon. We expect it to be above 0.7465 by year end.”

“The US dollar has recently been boosted by strong inflation data, pushing US interest rates higher. • But the RBNZ is likely to easily outpace Fed tightening during the next couple of years, so that yield spreads are likely to remain a source of support for NZD/USD for some time.” 

“Apart from yields spreads, NZ commodities should also be supportive. And perceptions of NZ economic strength will also be favourable for some time.”