NZD/FJD Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The New Zealand Dollar benefits from rising inflation expectations and potential monetary tightening from the Reserve Bank of New Zealand, while the Fijian Dollar remains stable with no significant monetary changes.
• Risk/commodities: Recent trends indicate a strong New Zealand economy bolstered by improved consumer confidence, while global risk appetite remains supportive, though not heavily impacting the FJD.
• One macro factor: A notable increase in New Zealand's annual consumer inflation to 3.1% suggests the RBNZ may adopt a more hawkish stance, supporting the NZD.
Range: The NZD/FJD pair is likely to drift within the recent 3-month range, given the stable conditions.
What could change it:
• Upside risk: A sudden rise in commodity prices could boost the NZD further.
• Downside risk: A sharp decline in global economic conditions may pressure the NZD and result in a reevaluation of current pricing.
