FXStreet (Delhi) – Research Team at NAB/BNZ, suggests that the key drivers of the NZD remain negative with lower risk appetite, falling commodity prices, narrowing NZ-US rate spreads, and weaker Asian currency dynamic. Key Quotes “The NZD began the year on a very weak note and we expect further depreciation through the year. In our modelling framework, the key drivers all point to a weaker NZD this year. Risk appetite has evaporated, with equity markets lower, credit spreads wider and higher market volatility. This sort of environment is usually negative for the Kiwi. Our forecasts show the NZD/USD cross rate falling towards the 60 US cent mark in the first half. A move into the high 50s can’t be ruled out, but we suspect that the currency wouldn’t sustain that level for long. The NZD is still projected to decline on all the crosses this year, including against the AUD. The NZ economy is likely to underperform the Australian economy over the next year. NZ’s unemployment rate is on an upward trend, while Australia’s is on a downward trend. With inflation undershooting the RBNZ’s mid-point, there is a greater chance of the RBNZ delivering further rate cuts this year, than the RBA. We see AUD/NZD trading up to 1.12 this year, down from our previous projection of 1.17, but we’d note the risk of overshooting our year-end target.” For more information, read our latest forex news.