Westpac Bank: NZD/USD will fell under 0.6800

Westpac, the bank most familiar with the New Zealand economy, has published its expectations about NZD/USD development over the next few months. According to the bank, there are several fundamental reasons for bringing the pair down to around 0.68/6700. First of all, Westpac highlights the Fed's policy of tightening monetary policy. Interest rate hikes in the United States lead to a high interest rate differential between the Fed and RBNZ rates. The bank then refers to New Zealand's domestic economic data, which indicates a slowdown in the economy. Last but not least, we should note that RBNZ will not take action to tighten monetary policy until the fears of the war are completely disintegrated. Currently, the US-China trade war remains the greatest risk to New Zealand's economy, which is heavily dependent on China.

"We expect the NZD/USD to fall to 0.6800 by the end of September and to 0.6700 or lower by the end of December," Westpac said.

What other leaders in the banking industry think you can follow on the main schedule.

Chart: Used with permission of Bloomberg Finance L.P.

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