Hold Onto The Rails. The Kiwi Flyer Is Destined To Be Higher

• What a year it’s been for the Kiwi dollar. We’ve been all over the place as recoveries stopped and started, global trade rules were rewritten, and the dominance of the US dollar was questioned. There was a lot of volatility. 2026 will be no different, but the outlook for the Kiwi is higher.
• The RBNZ has seemingly called time on the easing cycle. With monetary policy clearly stimulatory, we forecast a robust recovery for the Kiwi economy. If all goes to plan, the Kiwi could hit 63c next year.
• As always, risks are abound. Rate hikes are being priced in for 2026. That’s too soon. The tightening in market conditions has gone too far. And the RBNZ agree. The Kiwi dollar may face some short-term weakness as market pricing recalibrates.

The Kiwi flyer (NZDUSD) has been on one heck of a ride this year. We may have ended the year close to where we started, but it’s been anything but a straight line. We began 2025 on the backfoot with a 55cent-handle. Then just as the Kiwi economy was recovering and the NZD was on the way up, Liberation Day came and conquered financial markets. Trumpian tariffs saw the Kiwi drop to the lowest level in 16 years as forecasters painted nightmarish outlooks for the global economy. At the same time, (misplaced) fears of the end of the US Greenback’s reign as the world’s reserve currency were circulating. The Kiwi benefitted and recovered to a touch above 61c in July. From there, the trajectory turned south. The local economy lost momentum, the RBNZ delivered a 50bps cut in October and the Kiwi flyer’s wings were clipped. Now, the RBNZ’s cutting cycle is coming to a close. The Kiwi dollar has bounced off the November lows, and looks set to end the year oscillating around 58c. That’s the 2025 recap. Now we’re left contemplating what’s in store for the Kiwi dollar in 2026.

We’re expecting a recovery in the economy, and with that, we’ll see a recovery in the Kiwi. If all goes according to plan, and that’s a big IF, then the Kiwi could hit 63c next year.

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