The NZD to CAD exchange rate is currently range-bound, trading close to its recent three-month average.
The interest rate differential favors the CAD, as the Bank of Canada maintains a steady policy rate at 2.25%, while the Reserve Bank of New Zealand is expected to implement rate cuts, potentially impacting the NZD negatively. Additionally, recent robust job growth in Canada has raised confidence in the CAD. Conversely, New Zealand's GDP growth has not significantly boosted the NZD, with upcoming trade figures being critical for any support. Trade has shown stability, with the NZD trading in a tight 3.5% range.
In the near term, the NZD/CAD rate may continue to fluctuate within the established range, influenced by movements in oil prices, which are currently low. An upside risk includes stronger-than-expected trade figures from New Zealand, while a downside risk could be a further decline in oil prices impacting the CAD.