The exchange rate for CAD to NZD has recently shown fluctuations, currently sitting near 1.2199, close to its 3-month average. This positions the currency pair at 7-day lows but within a stable trading range of 1.2015 to 1.2303 over the past three months. Analysts note that the Canadian dollar (CAD) has weakened alongside the US dollar, primarily influenced by factors such as the recent Ivey PMI report, which, despite being stronger-than-expected, failed to elevate CAD.
Looking ahead, the Canadian jobs report is a focal point, with expectations of a potential rise in unemployment that could further pressure the CAD. Political instability stemming from recent leadership changes and trade tensions with the U.S. over tariffs also cast a shadow on the Canadian economy and, subsequently, the CAD's value.
Conversely, the New Zealand dollar (NZD) has benefitted from a risk-on market mood, enhancing its value against various currencies, including CAD. The prevailing market sentiment suggests that continued optimism could bolster the ‘kiwi’ in the near term. However, it is essential to consider that the NZD’s performance may remain influenced by global trade dynamics, especially with ongoing uncertainties regarding trade tariffs under a potential future U.S. administration.
Moreover, the commodity correlation remains crucial, especially as Canada is a major oil exporter. Recent oil price data indicates that oil is trading at $66.43, which is 2.8% below its 3-month average, and has experienced significant volatility. This fluctuation can impact the CAD, given its close ties to the oil market, while also affecting the overall outlook for the NZD based on global commodity demand.
As both currencies continue to navigate through these challenges and opportunities, careful monitoring of economic indicators and market sentiment will be vital for individuals and businesses engaging in international transactions.
