Currencies
Tide May Turn for NZ Dollar as Bets on Interest Rate Cuts Pared
- Higher dairy prices, rate gap with Fed to support currency
- Upcoming NZ inflation data may shed light on policy direction
Cows stand on a hill at a dairy farm in Hawera, New Zealand.
Photographer: Brendon O'Hagan/Bloomberg
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The worst may be over for the New Zealand dollar as higher dairy prices and a push-back of interest rate cuts by the nation’s central bank should support the currency.
The kiwi may recover toward 62 US cents by March-end as traders abandon bets of a May rate cut, according to forecasts. The currency can reach “the mid-60’s” should the Federal Reserve ease policy before the Reserve Bank of New Zealand, Westpac Banking Corp. analysts wrote in a note. The currency closed at 61.13 cents on Friday.