Rabobank makes outlandish prediction that NZD/USD is set for big drop


Dutch financial giant Rabobank, itself an institution with plenty of expertise as a Tier 1 FX interbank dealer, has made an outlandish prediction regarding the direction of the New Zealand Dollar when traded against the US Dollar.

Analysts within the financial institution stated yesterday that they expect the US Dollar to continue to garner interest as a result of safe haven demand, regardless of some degree of speculation that the US Federal Reserve's policy of fiscal tightening over the next few months has been underestimated.

Rabobank's analysis showed that there is an expectation that the NZD/USD pair could reach lows around the 0.61 mark, which is of course speculatory but still an interesting observation.

One of the most important effects on the New Zealand economy that has taken place in recent times is the draconian lockdowns implemented by prime minister Jacinda Adern, who is regarded by many to have socialist political views.

Her administration became very unpopular during the period between March 2020 and the end of last year, to the extent that a net 10,674 people left the country over the 12 months to May, causing a labor crunch which has impacted the economy.

When the country re-opened after a long period of all-encompassing lockdowns which crippled the economy, there was not a sudden return to economic norm that occurred in some other nations, largely because of such a high number of New Zealand's residents having left the country as soon as the airports reopened instead of staying behind to rebuild the stalled economy.

This considerable exodus occurred at the same time as New Zealand struggled to fill jobs, and at a time during which the number of foreign workers had been still very low, and during which the economy had been close to maximum employment.

Now, with no lockdowns in place, businesses are struggling to find employees with the right skills, which further impacts New Zealand's ability to remain a competitive economy, whereas other regions in which major currencies are the sovereign tender, there are less issues of this type, particularly in Europe and the United States.

Canada and Australia have experienced emigration increases, but Northern Europe and the United States are operating at full capacity with no mass exodus of skilled workers, and have benefited from the relocation of those from New Zealand with good skills.

This is one major factor that has contributed to the New Zealand Dollar's stunted progress, and it could be in for a long recovery.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Financial Market News

Weekly Market Wrap With Gary Thomson: Nasdaq 100 Index, GBP, SNB Interest rate, Brent Crude Oil Weekly Market Wrap With Gary Thomson: S&P 500 Index, US Dollar, FTSE 100 Index, Gold Price Weekly Market Wrap With Gary Thomson: S&P 500, US Dollar, Gold and Silver, MSFT Shares Weekly Market Wrap With Gary Thomson: Nasdaq 100, NVIDIA, EUR/USD, Gold price Weekly Market Wrap With Gary Thomson: S&P500, US Dollar, Gold Price, PEP Stocks

Latest articles

Forex Analysis

USD/CAD Rate Reaches Significant Support Level

On June 12, we wrote about bearish signs observed on the USD/CAD chart, pointing to the prospect of USD weakening.

Since then, the USD/CAD rate has decreased by approximately 0.75% and has reached an important support level,


Nasdaq 100 Index Failed to Hold Above 20,000 Points

On 18th June, we reported that the Nasdaq 100 (US Tech 100 mini on FXOpen) market had recorded a historic high by surpassing the psychological level of 20,000.

At that time, we pointed to the upper line of the

Forex Analysis

Dollar Declines: How Deep Could the Correction Be?

By the end of last week, the American currency traded rather mixed:

  • The USD/JPY currency pair strengthened by more than 200 pips and almost tested the significant resistance level at 160.00.
  • The USD/CAD pair failed to break
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.