ANZ Research discusses NZD outlook and target NZD/USD and AUD/NZD at 0.64, and 1.17 respectively by year-end.

"The NZD was the strongest performer in the G10 through May, with NZD/USD rising 1.3%. The move was driven by a more clearly hawkish RBNZ and a drop in oil prices. Clear de-escalation and reopening of the Strait of Hormuz would support gains via improved risk sentiment and lower oil prices. In that scenario, the NZD should continue to outperform, particularly as rate differentials would regain further control of moves, which, given how hawkishly the RBNZ has repriced, should be supportive," ANZ notes.

"AUD/NZD reversed sharply lower after reaching a year-to-date high of 1.2288 (27 May), ending the month closer to 1.20. This reflected soft Australian data and the RBNZ’s hawkish hold. We think the cross has peaked. With the RBA probably at the end of its cycle and the RBNZ set to begin hiking, widening rate differentials should drive AUD/NZD lower, in line with our year-end forecast of 1.17. Positioning dynamics also favour downside, with AUD still heavily net long, leaving the cross vulnerable to a pullback," ANZ adds.