Kiwi will fall sharply by year's end, says bank

Kiwi will fall sharply by year's end, says bank

The Kiwi dollar traded above US77 cents during the weekend, but the global backdrop for the dollar is as "good as it gets" and Deutsche Bank is expecting the dollar to fall sharply to US68c by the end of the year.


Another forecaster, Infometrics, is picking the economy to cool and higher interest rates and lower migration to trip up the housing market, which is expected to drop 3 per cent in the year to March 2009.

The New Zealand dollar was trading just under US77c late on Friday, after official figures showing March quarter economic growth of 1 per cent, with some economists expecting a much slower run in the second half of the year.

The dollar traded slightly above US77c yesterday, still around a 22-year high, and a vast leap above the 10-year average of US56c.

The Kiwi, like many currencies, is also extremely strong against the Japanese yen, trading about 95 yen, compared with a decade average of just 66 yen.

Deutsche Bank is forecasting the dollar will drop back to US72c in September and down to US68c by the end of the year.

from stuff.co.nz