It was a topsy-turvy year for the Kiwi to say the least, but NZD/USD managed to end almost right where it started for 2013!
As you’ve probably noticed from the chart above, NZD/USD was mostly driven by central bank rhetoric and risk sentiment. At the start of the year, Wheeler already expressed his desire for a weaker Kiwi, as this would benefit New Zealand’s export industry. Later on, the RBNZ admitted to secretly intervening in the forex market, pushing NZD/USD down to the .7700 levels.
Although the chemical warfare in Syria weighed on overall risk appetite in the latter half of the year, the RBNZ’s hints of a potential rate hike were enough to keep the Kiwi afloat. Were it not for the strong gains in U.S. employment and the increased odds of a Fed taper in December, NZD/USD probably wouldn’t have stopped short of testing its yearly highs!
For now, the New Zealand dollar still seems to be enjoying a bit of support from rate hike expectations for next year, but it remains to be seen whether the RBNZ will follow through with its forecasts. Do you think the Kiwi could start soaring in 2014?