Citibank has expressed concerns about the potential impact of the upcoming US presidential election in November on currencies with high interest rates in the US, expecting the New Zealand dollar (NZD) to underperform.
According to CitySea, the financial environment is likely to see increased risk aversion as elections approach, which usually does not bode well for currencies with high interest rates such as the New Zealand dollar.
The recent decision by the Reserve Bank of New Zealand (RBNZ) to initiate monetary easing has added to the unequal risks facing the New Zealand dollar. Citibank expects the recent recovery of NZD against the US dollar to stop before it reaches 0.61 USD/NZD.
Read also:Dollar Maintains Strength on Positive U.S. Economic Data
The company expects the pair to fall to a 2023 low of around $0.58 USD/NZD in the coming months.
In addition, the performance of the New Zealand dollar against the Japanese yen (JPY) is also under scrutiny. Citibank’s analysis indicates that NZD/JPY has reached a long-term ceiling, suggesting that any future retracements are unlikely to push the currency pair above its 200-day moving average, which currently stands at around 92 yen/NZD.
Citibank’s outlook reflects a cautious stance on the New Zealand dollar in the context of global political events and central bank policy decisions.
This article was translated with the help of an artificial intelligence program after an editor’s review. For more details please refer to Banha Terms and Conditions
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