MUFG Research discusses NZD/USD outlook and targets the pair at 0.6600 into year-end and at 0.6700, 0.6800, and 0.6900 by end of Q1, Q2, and Q3 of next year respectively.
"Our forecasts in recent months reflected our view that NZD would correct and consolidate after notable gains during the recovery phase after the first wave of COVID. Over the short-term, there is scope for recent weakness to persist with the RBNZ still quite dovish and expectations are increasing further of more monetary easing to come," MUFG notes.
"The RBNZ is committed to holding the official policy rate at 0.25% until March. Futures pricing beyond then indicates a clear shift into negative policy rates. With that now looking increasingly likely even assuming a gradual improvement in the global economic outlook, we assume only modest NZD appreciation going forward," MUFG adds.