NZD/CNY Outlook:
The NZD/CNY exchange rate is slightly positive, but likely to move sideways as it trades above its recent average and lacks a clear driver to push it in either direction.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand maintains a higher cash rate than the People's Bank of China, supporting a stronger NZD against the CNY.
• Risk/commodities: Recently, global dairy trade prices have increased, boosting New Zealand’s trade position and potentially benefiting the NZD.
• One macro factor: China's recent economic growth figures exceeded expectations, showing stronger recovery than anticipated, which supports the CNY.
Range:
The NZD/CNY is likely to drift within its recent 3-month range, testing extremes on both ends as factors evolve.
What could change it:
• Upside risk: Further increases in global dairy prices could bolster the NZD.
• Downside risk: Ensuing tensions between the US and Iran might reduce risk appetite and press down on the NZD.
