Fresh jawboning from Wheeler.
While the New Zealand dollar has eased recently, we believe the exchange rate remains unjustified in terms of current economic conditions, particularly export prices, and unsustainable in terms of New Zealand's long-term economic fundamentals. We expect to see a further significant depreciation.
On a trade-weighted basis, the New Zealand dollar remains unjustifiably high and unsustainable in terms of New Zealand's long-term economic fundamentals. A substantial downward correction in the real exchange rate is needed to put New Zealand's external accounts on a more sustainable footing.
So 'significant depreciation' becomes 'substantial downward correction'. Tough to separate the differences.
Update: Some traders pointing out the change from 'expect' to see a depreciation to a correction is 'needed'. That could be a nod to more intervention.
