The NZD to AUD exchange rate currently shows a bearish bias as the NZD faces downward pressure.
This is primarily driven by the following factors:
- Anticipated interest rate cuts by the Reserve Bank of New Zealand (RBNZ) could weaken the NZD further, as rates are forecasted to decline amid economic challenges.
- The Reserve Bank of Australia (RBA) is expected to raise its interest rates, enhancing the appeal of the AUD compared to the NZD.
- Additionally, New Zealand’s sluggish economic growth could contribute to the NZD's weakness against the AUD.
In the near term, the NZD/AUD pair may remain within a stable trading range. Recent price data indicates that it is at 90-day lows and has stabilized between certain limits.
Upside risks include unexpected positive developments in the New Zealand economy or shifts in global risk sentiment that favor the NZD. Conversely, a faster pace of interest rate hikes by the RBA could further depress the NZD against the AUD.