The New Zealand dollar (NZD) has faced challenges recently, particularly despite positive domestic GDP data that typically would bolster confidence and investor sentiment. Analysts suggest that the market's muted reaction to the strong GDP figures indicates concerns regarding the Reserve Bank of New Zealand's (RBNZ) monetary policy. Anna Breman’s recent appointment as the RBNZ Governor and her focus on maintaining low and stable inflation may shape the currency's performance. A recent reduction in the official cash rate to 2.25% signals the conclusion of the bank’s easing cycle, but uncertainty about future rates remains.
In addition to monetary policy shifts, upcoming trade figures are significant for the NZD. Should New Zealand's exports show an uptick, it could provide the currency with some much-needed support. However, with current trading near 14-day lows of approximately 0.4580 against the Swiss franc (CHF), the NZD is positioned just below its three-month moving average, exhibiting relatively minor volatility within a stable range of 4% over the last few months.
On the Swiss side, recent developments are shaping the CHF outlook as well. The Swiss National Bank (SNB) has held its interest policy steady, opting to maintain a 0% rate despite a downturn in inflation to 0%. Some economists doubt any justification for moving back to negative interest rates, indicating a preserved stable environment for the CHF. Furthermore, the recent U.S. tariff reductions on Swiss products are expected to alleviate some pressure on the export-driven Swiss economy, providing a potential boost to the CHF.
UBS has lowered its CHF forecasts, citing strong fundamentals amid global uncertainties, which could further influence the NZD/CHF exchange rate as investors look for safe-haven currencies. Given the steady depreciation of the NZD and the resilience of the CHF, the currency pair may continue to be influenced by these ongoing developments. Overall, while the NZD's near-term outlook remains constrained by local economic factors, the CHF's stability is enhanced by favorable external conditions and the SNB's cautious approach to monetary policy.
