Kiwi Poised to Outpace Euro as RBNZ Seen Tightening Faster
New Zealand's dollar is expected to rise against the euro due to expectations that the Reserve Bank of New Zealand (RBNZ) will outpace its European peer, the European Central Bank (ECB), in raising interest rates.
The kiwi may climb as much as 3.2% against the euro over the next three months, according to Macquarie Bank Ltd., with Westpac Banking Corp. and Canadian Imperial Bank of Commerce also predicting a rise in the currency's value.
The widening gap in expected interest rates is making the kiwi more attractive at a time investors are rewarding higher-yielding currencies.
Gareth Berry, a foreign-exchange strategist at Macquarie, said: 'We can imagine EUR/NZD drifting lower toward the 1.90 level over the next three months as RBNZ rate hikes are delivered.'