Economists at CIBC Capital Markets expect NZD/USD to remain under pressure in the short term. However, the pair is set to bounce back higher in the fourth quarter.
Short term headwinds
The on-hold RBNZ should enable NZD/USD to depreciate in the short term, as the Fed appears underpriced for a final hike. This dynamic should drive NZD/USD through Q3, but we then see the pair rising to 0.63 by Q4.
The weak Chinese economy is likely to continue weighing on the NZD through Q3, but when stimulus eventually arrives, NZD/USD should move higher.
Ultimately, NZD/USD faces short term headwinds from an on-hold RBA and weak Chinese economy, but over the longer term, the major drivers of the currency appear to be lining up for a NZD rally.
Source: https://www.fxstreet.com/news/nzd-usd-the-major-drivers-of-the-kiwi-appear-to-be-lining-up-for-a-rally-cibc-202308091307