NZD Is Likely To Experience Some Negative Pressure In The Next Few Weeks
[dropcap]N[/dropcap]ZDUSD is likely to experience some negative pressure in the next few weeks. This could be due to a variety of factors, such as the global economy or political instability. However, it is important to remember that no currency is ever completely free from volatility.
A snippet from HSBC, with a view on the New Zealand dollar, looking for a lower kiwi in the weeks ahead citing “broad risk sentiment and shorter-term yield differentials.” In the near future, HSBC is predicting that the New Zealand dollar will be worth less than it is now due to global risk factors and the difference in interest rates between New Zealand and other countries.
- When policy rates start to get close to the upper limits of what is considered to be safe, markets may become concerned. This is because a policy stance that is too hawkish could lead to an economic situation known as a hard landing.
- The Fed’s recent actions have given them a much stronger footing, which shorter-term NZ-US yield differentials are unlikely to offset. The NZD is not expected to see much support as a result.
