Bank of America Global Research discusses NZD/USD outlook and targets the pair at 0.64 by end of Q3 and at 0.62 by year-end.
"The NZD is likely to be held hostage to external factors, particularly the coronavirus situation and global recession. China remains New Zealand's largest trading partner and the first order impact on tourism, and to a lesser extent education services, is has been evident. Demand for soft commodities would be affected too, albeit to a lesser extent than investment-driven hard commodities. And higher global risk assets would typically support NZD," BofA notes.
"We continue to expect NZD/USD to end the year at 0.62 given the RBNZ remains among the most dovish G10 central banks, as well as our stronger USD forecast. We expect a meaningful recovery only in 2021 driven by the lagged impact of China recovery and once coronavirus uncertainty dissipates," BofA adds.