Downside pressure around NZD expected to ease by year-end – TDS

Strategists at TD Securities assessed their outlook on the Kiwi Dollar and the RBNZ.

Key Quotes

“We still expect a structural break in the RBNZ's messaging when well-known hawk Grant Spencer takes the reins next month, although admit that this is quite the minority view. While the 28 September OCR Review is too soon after the (uncertain election) we look for a step up in hawkish rhetoric with the November Monetary Policy Statment. If this doesn't happen, we will review TD’s call for a hike in Feb 2018”.

“We have lifted our NZD profile to reflect that the USD is no longer the downdraft we thought it would be. Recent NZD underperformance has been attributed to RBNZ jawboning, but we see that turning in final weeks of 2017”.