The New Zealand Dollar (NZD) has been on the back foot against the US Dollar (USD), declining in value and trading near the 0.6200 level. However, economists at ING are expecting the NZD/USD pair to bounce back in the second half of the year, targeting a rate of 0.67-0.68. This bullish outlook is largely due to external factors, such as improved risk sentiment, positive exposure to the Chinese economy as it reopens, and a general weakening of the US Dollar.
The NZD/USD rate is an important indicator of the relative strength of the two currencies, and can be affected by a variety of factors. For instance, the US Dollar is typically seen as a safe-haven currency, and when risk sentiment is low, investors tend to flock to the USD, driving down the NZD/USD rate. Similarly, when the Chinese economy is doing well, the NZD/USD rate tends to be relatively strong, as New Zealand benefits from strong export demand from China.
The US Dollar has been declining in value recently, as investors have become more comfortable with riskier investments. This has led to a weakening of the USD, which has been beneficial for the NZD/USD rate. Additionally, the positive exposure of the NZD to the Chinese economy has also been beneficial for the pair, as the Chinese economy has been reopening and recovering from the effects of the COVID-19 pandemic.
Economists at ING are expecting the NZD/USD rate to continue to benefit from these external factors in the second half of the year, targeting a rate of 0.67-0.68. This would be a significant increase from the current level of 0.6200, and would be a welcome development for New Zealand exporters, who have been affected by the weakened NZD/USD rate.
It remains to be seen whether the NZD/USD rate will reach the 0.67-0.68 target, as the pair is heavily influenced by external factors, such as risk sentiment and the Chinese economy. Nevertheless, the economists at ING are expecting the NZD/USD rate to bounce back in the second half of the year, and this could be beneficial for New Zealand exporters and the economy as a whole.
In conclusion, the NZD/USD rate has been declining in recent months, but economists at ING are expecting the pair to bounce back in the second half of the year. This bullish outlook is largely due to external factors, such as improved risk sentiment, positive exposure to the Chinese economy, and a general weakening of the US Dollar. If the NZD/USD rate does return to the 0.67-0.68 target, this could be beneficial for New Zealand exporters, as well as the economy as a whole.
