NZD/USD to turn back higher later in 2022 – MUFG

The New Zealand dollar has been trending weaker in recent months. Economists at MUFG Bank expect the kiwi to recover later in 2022 as the Reserve Bank of New Zealand (RBNZ) has plenty of space to hike.    

RBNZ is expected to be the most aggressive in tightening through this year

“The OIS market pricing showing the RBNZ is expected to be the most aggressive in tightening through this year.”

“Even if economic data remains mixed, the RBNZ will be determined to move forward with additional rate hikes. This could weigh on NZD performance initially but assuming domestic conditions improve, NZD recovery later in the year should follow.”