New Zealand Dollar Forecast to Fall in 2025 by Westpac

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NZD looks set to fall against the EUR and GBP next year, however, it will advance against USD as the Trump euphoria fades.

Westpac's November 2024 Market Outlook is out and updates with its expectations for the New Zealand Dollar in the coming months.

Westpac, which is one of New Zealand's biggest lenders, expects the Reserve Bank of New Zealand (RBNZ) to continue normalising monetary policy, with a further 50 basis point cut to the Official Cash Rate (OCR) in November 2024.

This move aims to stimulate economic growth, which is expected to recover in 2025, however, it could pose headwinds to the domestic currency.



Westpac anticipates a modest down-trend for the U.S. dollar through 2025 and 2026.

"The expected acceleration in the US growth pulse that the market is building into FX valuations does not have a strong foundation. Further, it is entirely possible the benefits of new policy passed will be negated by capacity and price pressures," says Elliot Clarke, Head of International Economics at Westpac.

This is despite Donald Trump's re-election, which has initially boosted the U.S. Dollar.


Investment bank GBP/NZD consensus forecasts: The end-2024 and 2025 guide from Corpay has been released. Featuring the median, mean, high and low points forecasted by over 30 investment banks. Please request a copy here.


Analysts attribute the anticipated weakening to several factors, including the Federal Reserve's easing of monetary policy, uncertainty about the net impact of U.S. economic policies, and potential capacity and price pressures in the U.S. economy.

They say Asia, particularly China, holds considerable growth opportunities in the coming years.

As short-term U.S. dollar interest rates normalise, investors might shift their focus away from the U.S. and toward these emerging markets, potentially benefiting currencies like the NZD.

Despite the Kiwi being expected to rise against the U.S. Dollar it is tipped to depreciate against the Euro (EUR) and the British Pound (GBP) over the forecast horizon.

This suggests that Westpac expects the EUR and GBP to outperform the NZD, even as the NZD appreciates against the USD.

New Zealand Dollar Forecasts from Westpac

Westpac's point forecast for NZD/USD exchange rate is a flat 0.59 from year-end 2024 through to year-end 2025.

The conversion is currently at 0.5860, putting it close to the December target.

The bank's point forecast for NZD/EUR is 0.55 for end-2024, ahead of a fall to 0.54 for the duration of the next year. This gives a EUR/NZD conversion of 1.82 and 1.85, up from current levels at 1.7957.

For NZD/GBP and GBP/NZD, the point forecast is 0.46 / 2.17 for year-end, ahead of a rise to a flat profile of 2.22 for the duration of 2025. The market is currently at 2.1589.

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