Although we think there are more reasons to be bullish than bearish, there are downside risks too.

While we are forecasting mild NZD strength over 2024, crosscurrents aplenty speak to continued volatility and range trading. 

The Yen has been the main beneficiary of US regional bank woes this week, and that has weighed on NZD/JPY. But going the other way, NZD/AUD has appreciated, confounding consensus expectations for weakness. That move may have further to go given pleasing Australian CPI data earlier in the week, which should cement market expectations for RBA cuts by H2 and given the RBNZ’s much less dovish tone. But volatility could be the winner this month.