Anna 
The NZD/USD pair navigated a week marked by volatility, prompting economists at ANZ Bank to scrutinize the Kiwi’s outlook and weigh the factors influencing its trajectory.
ANZ Bank acknowledges that there are more reasons to be bullish than bearish for the New Zealand Dollar (NZD); however, they caution that downside risks persist. The forecast points towards a mild NZD strength throughout 2024, but the analysts emphasize that various crosscurrents in the market suggest the likelihood of continued volatility and range trading.
This week, the Yen emerged as the primary beneficiary amid troubles in US regional banks, exerting downward pressure on NZD/JPY. Conversely, the NZD/AUD pair experienced appreciation, defying consensus expectations of weakness. ANZ Bank suggests that this movement might have additional room for growth, particularly in light of positive Australian Consumer Price Index (CPI) data earlier in the week. The data is expected to solidify market expectations for Reserve Bank of Australia (RBA) cuts in the latter half of the year, coupled with the Reserve Bank of New Zealand’s (RBNZ) comparatively less dovish stance.
Despite these trends, ANZ Bank highlights the prevailing uncertainty and potential for volatility in the coming month, indicating that market dynamics could favor unpredictability. Investors are advised to stay vigilant and adapt to changing conditions as the NZD/USD pair continues to navigate its current landscape.
