ANZ Research adopts a bullish bias on NZD and expects AUD/NZD to drift lower towards 1.17 by year-end.

"We take a constructive view on the NZD. Of the G10 currencies, we expect it to be a key beneficiary of the US-Iran deal. It will get support from better risk sentiment and the likely pullback in oil prices via the terms-of-trade channel. Additionally, based on market pricing, the RBNZ is set to enter the most aggressive tightening cycle of all G10 central banks to year end which will be supportive via rate differentials, particularly given our view of stretched rate hike expectations for various other G10 central banks. We continue to expect the RBNZ to deliver three consecutive 25bp hikes, commencing in July and taking the Official Cash Rate to a terminal 3%," ANZ notes.

"On the crosses, the AUD/NZD pulled back slightly after reaching a year-to-date high near 1.23. We think the pair has peaked this year and continue to forecast a yearend rate of 1.17. The NZD would be better supported, as a decline in oil prices will reduce its negative terms-of-trade shock. Additionally, with the RBA and RBNZ at different stages of their hiking cycles, AU-NZ rate differentials would likely be supportive of a lower AUD/NZD," ANZ adds.