Goldman Sachs: Nudging Up Near-Term Forecasts On Less-Dovish RBNZ

Goldman Sachs note that in their 2021 annual outlook they "argued that NZD would likely outperform AUD in the year ahead as improving domestic and global growth resulting in a pricing-out of RBNZ rate cuts. This shift has in fact already played out: 1y NZD OIS rates have increased from around zero in early November to +0.2% currently. In addition to positive vaccine developments, the move reflected comments from the RBNZ that appeared to put more caveats around the prospects for further easing ("as needed"), and news that the New Zealand government may add house price stability to the central bank's remit. We are therefore nudging up our 3m and 6m NZD/USD forecasts to $0.71 and $0.72 respectively (from $0.69 and $0.71 previously); we are holding our 12m target at $0.74 for now. These changes imply a target of NZ$1.04 for the AUD/NZD cross, moderately below current spot."