NZD/USD to fall towards 0.70 in the first quarter of 2021 – DBS Bank

The NZD/USD pair fell 0.5% to 0.7158 on Monday, below 0.7184 or its end-2020 level for a fourth straight session, and economists at DBS bank expect the kiwi to slide towards the 0.7000 level in the coming months.

Key quotes

“Technically, NZD/USD has been capped at 0.72 but needs to take out its 0.7130 support (50-DMA) before it can test 0.71 or January’s lows again.” 

“Ironically, the NZD’s rally stalled after expectations increased for inflation to rise towards the official 2% target by mid-year. The Reserve Bank of New Zealand may, at its meeting on 24 February, rule out more rate cuts.” 

“The Ministry of Health is concerned that the new EU controls on COVID-19 vaccine exports could slow New Zealand’s pandemic response.”