ANZ Research discusses NZD outlook and adopts a strategic neutral bias in 2020, while staying bullish on AUD/NZD and looking to buy dips.
"The RBNZ’s changes to bank capital are a hurdle for the NZD, as are further cuts to the OCR. But with our forecasts for the latter now pushed into the middle of 2020, we don’t see the NZD falling as much as we had expected. We expect a flatter path going into 2020. An improving geopolitical backdrop will add support, with more strength likely if the global growth outlook improves," ANZ notes.
"We are more neutral on the AUD and NZD than global factors suggest, as central banks grapple with low inflation and policy easing despite the improved global environment. Given global positioning, we remain bullish on AUD/NZD awaiting levels to buy for an eventual push towards 1.10," ANZ adds.