Bank of America Predicts Sharp Decline in NZD/USD Amid Dollar Strength and RBNZ Policy Shift
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
- Dollar Strength Factors: Bank of America forecasts significant downward pressure on the NZD/USD due to resilient US economic fundamentals, projecting a decline to 0.5800, representing a 5% downside, particularly as monetary policy divergence between the Fed and RBNZ widens.
- Comparative Economic Indicators: The US GDP growth forecast for 2025 is set at 2.3%, while New Zealand's has been revised down to 1.8%, highlighting stark economic performance differences that exacerbate downward pressure on the NZD/USD, especially amid slowing consumer spending and housing markets in New Zealand.
- Technical Analysis Signals: The report indicates that key support levels have recently broken, suggesting further downside potential for the NZD/USD, while narrowing interest rate differentials diminish the New Zealand dollar's investment appeal, increasing exchange rate volatility risks.
- Market Sentiment Impact: Global risk sentiment significantly influences the New Zealand dollar's performance, with current geopolitical tensions and commodity price volatility leading to cautious investor positioning, typically causing the NZD to weaken as a risk-sensitive currency, thereby supporting the dollar's strength.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
