Kiwi Set to Outpace Euro as NZ Rate Gap Widens

New Zealand's dollar is poised to rise against the euro due to expectations that the Reserve Bank of New Zealand will increase interest rates more aggressively than its European peer, according to strategists.

Macquarie Bank Ltd. predicts that the kiwi will climb as much as 3.2% against the euro over the next three months, with Westpac Banking Corp. and Canadian Imperial Bank of Commerce also showing optimism.

The Reserve Bank of New Zealand is expected to increase its benchmark rate by more than a percentage point over the next year, compared to about 75 basis points of tightening from the European Central Bank, based on overnight index swaps.