The exchange rate forecasts for the NZD to CAD are characterized by a mix of adverse domestic influences on the New Zealand dollar and external pressures affecting the Canadian dollar. Recently, the NZD has faced significant headwinds largely due to the dovish monetary policy stance taken by the Reserve Bank of New Zealand (RBNZ), which cut the official cash rate to a three-year low of 3.00%. The central bank has hinted at further potential cuts, exacerbating the NZD’s decline in sentiment.
Adding to the NZD's woes are the recent increases in U.S. tariffs on New Zealand exports, which have sparked fears about the health of the export-driven New Zealand economy. Coupled with a softening labor market — evidenced by an uptick in unemployment to 5.2% — these factors contribute to a generally bearish outlook for the kiwi as investors react to the heightened risk environment stemming from global economic uncertainties.
Conversely, the Canadian dollar has also experienced volatility, largely due to fluctuating oil prices. As a major oil exporter, the CAD’s fortunes are closely linked to global oil prices, which recently have fallen to 90-day lows around 65.50, well below the three-month average of 69.04, and exhibiting a volatile trading range. This drop in oil prices has put downward pressure on the CAD as demand for Canadian commodities weakens. Despite this, the CAD saw a brief rally in August after dovish statements from U.S. Federal Reserve Chair Jerome Powell and a rollback on some U.S. tariffs by Canadian officials aimed at strengthening trade ties.
Market participants monitoring the NZD-CAD exchange should consider these dynamics: the NZD is currently trading at near 14-day highs of approximately 0.8154, within a stable range from 0.8079 to 0.8323. This stability may be tested given the prevailing risks affecting both currencies. Analysts suggest that continued fluctuations in oil prices, alongside economic developments from both New Zealand and Canada, are essential indicators to watch in the coming weeks. As uncertainty looms in global markets, traders and businesses engaging in international transactions could benefit by staying attuned to these evolving economic conditions and their implications for the NZD to CAD exchange rate.
