Economists at Westpac see upside potential for the kiwi towards 0.6735 multi-day. Medium-term, though, NZD/USD could push back down to 0.6500.

Potential for another significant rally in the USD once the Fed cycle is underway

“We expect 0.6735 to be tested.”

“The RBNZ MPS will almost surely deliver a 25bp hike. It should also raise its OCR forecast, to terminate closer to 3.0% than the 2.6% it currently has. And there may be some discussion about balance sheet shrinkage. All that should be enough to maintain a hawkish bias in rates markets and keep the NZD underpinned near-term.”

“Multi-month, we continue to expect another USD rally after the Fed has started hiking in March. That should at least slow any NZD upside, and could even cause a final dip to 0.6500, which could be a buying opportunity.”