What the Big 4 Banks Forecast for the New Zealand Dollar in 2020
A bank forecast for the New Zealand Dollar (NZD USD) usually differs between banks and changes from month to month. This article looks at the general trend in NZD USD forecasts from the big 4 banks and how it might impact you.
Bank forecasts for the NZ Dollar
The New Zealand Dollar (NZD USD) is predicted to stay weak around 63 cents in the first half of 2020. Bank forecasts suggest the NZD currency will only pick up slightly by the end of the year.
However, major banks are expecting global conditions to continue to deteriorate early in 2020. This could drive the NZD exchange rate even lower than current forecasts.
Check today's NZ Dollar Exchange Rate: Currency Converter and Graph
Updated in November 2019
How to compare the best NZ Dollar exchange rates
Compare exchange rates from Australian banks and foreign exchange leaders.
You don't like getting ripped off. So why are you ok with paying exorbitant fees and rates on currency conversions? You shouldn't be.
At The Currency Shop we help you compare providers to find the best NZD exchange rates and lowest fees right now. Leaving you more time and energy to conquer the world.
New Zealand Dollar forecast in 2019
The NZD exchange rate is much lower than initial major bank forecasts. In fact, even the Reserve Bank of New Zealand (the RBNZ) has got it wrong. The current NZD exchange rate is more than 4% below the RBNZ's previous forecast. Banks predict this weakness to last for the rest of the year and continue into 2020.
Will the NZD get stronger in 2020?
Unlikely. If we're to believe major bank New Zealand Dollar forecast, the NZDUSD will remain weak around current levels of 62 NZ cents to the US dollar. And perhaps move a touch higher at the end of the year.
Let's examine the 4 most likely reasons the NZ dollar will remain weak at current forecast levels:
- New Zealand's economy continues to slows, the Reserve Bank of New Zealand cut interest rates earlier than expected, devaluing the NZD
- Economic growth countries outside of New Zealand slow down and inflation only slowly and gradually picks up, increasing the chance of interest rate cuts elsewhere
- The US economy picks up, US political risks ease, and the Federal Reserve (central bank) increases interest rates, supporting the USD
- China’s economic growth slows more than expected, reducing China trade and lowering demand for NZ imports
How does a weaker NZD affect me?
A weaker New Zealand dollar isn’t great for New Zealanders living in Australia and other places abroad. Those who have moved to overseas locations will see a decline in overall spending power if they're servicing their lifestyles with NZD payments.
Although the NZD exchange rate could improve in 2020, the outlook is uncertain and most bank analysts expect a weaker performance.
If you want to have some certainty for your money transfers even when the New Zealand dollar is weak, you can check out our currency calculator for the best rate.
While holidays for foreigners going to New Zealand will be cheaper, it won’t be a great time for New Zealanders to travel overseas in 2020. However, if you have to do some travel you should book for the second half of the year. You just might get a slightly better exchange rate than the first half of the year.
What are the key influences on the NZD exchange rate?
1. New Zealand Economy
The New Zealand economy is growing as evidenced by greater exports than imports and low unemployment, but there are worries around the country’s housing sector. Domestic economic weakness can lead to a weaker NZD. Unfortunately, a slower global growth environment can also impact the domestic economy.
2. New Zealand Politics
The political scene in New Zealand has generated uncertainty. Greater uncertainty from politics means investors will sell the NZD. Particularly, if government policies are deemed as unhelpful for economic growth.
3. Other Currencies
The US dollar (USD) has a significant influence on the New Zealand Dollar. Generally, when the USD gets stronger, the NZD is relatively weaker and vice versa.
NZD to USD Exchange Rate Calculator
NZD bank forecast currency pairs
NZD to GBP forecast
The NZD GBP cross rate will largely be at the whim of Brexit developments and will therefore continue to be volatile near-term. Currently the NZD GBP is trading around 0.4946. Longer term outlooks suggest the NZD GBP currency pair could remain around 50 cents by the end of 2020.
Related Article: British Pound GBP Bank Forecast 2020
NZD to AUD forecast
The NZD AUD exchange rate has been choppy since the beginning of the year, currently settling around 0.9500. For 2020, the major banks are expecting the NZD AUD to stay around 95 NZ cents to the Aussie dollar or move slightly lower.
Related Article: Australian Dollar AUD Bank Forecast
NZD to EUR forecast
The NZD EUR cross rate has fallen 5% to about 0.5800 from the 2019 high near 0.6087 reached in March. Unfortunately, major banks think the NZD EUR cross rate could fall again in 2020, towards 0.5500 by the end of the year.
Related Article: Euro EUR Bank Forecast 2020
Where to find the best NZD cash rate
In Australia, the best cash rates are found in major cities. We regularly check the main money changers in each CBD to find out the best forex exchange rates for New Zealand Dollars in town.
How to track down the best cash rate
You can either walk around to each money changer, try and call each one and check their rate or you can use our city and suburb guides:
General advice: The information on this site is of a general nature only. It does not take your specific needs or circumstances into consideration. You should look at your own personal situation and requirements before making any financial decisions.