NZD/CNY Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average, with no clear driver emerging.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand is expected to reduce interest rates to boost growth, while the People's Bank of China has introduced measures to keep its monetary policy loose.
• Risk/commodities: High dairy prices are supporting New Zealand's exports, providing a cushion for the NZD.
• One macro factor: China's economy is showing stronger-than-expected growth, bolstered by government stimulus, which could impact the CNY's value.
Range:
The NZD/CNY is likely to drift within the recent range, without testing the extremes despite being in a stable position.
What could change it:
• Upside risk: If global risk appetite improves significantly, NZD could gain further traction.
• Downside risk: Renewed trade tensions affecting global supply chains could pressure the NZD.