As long as Chinese growth concerns are in the headlines, the kiwi will be vulnerable, according to economists at Rabobank.
“Whether or not Chinese demand for New Zealand dairy and meat proves to be fairly inelastic could be crucial for the incomes of many domestic businesses this year and for the outlook for the NZD.”
“While the kiwi has seen a lift recently from the government’s success in containing the virus, headwinds remain substantial.”
“We see risks of a dip towards NZD/USD 0.57 on a 3 to 6-month view. This assumes an intensification of US/China tensions in the run up to the US Presidential election and an associated increase about the pace of Chinese growth.”