The New Zealand dollar (NZD) has recently experienced significant downward pressure, primarily driven by a deterioration in market risk appetite. Analysts suggest that this trend could continue as global economic uncertainties weigh heavily on the currency. With New Zealand data lacking in the immediate calendar, the NZD remains particularly vulnerable to fluctuations in market sentiment. This situation has been exacerbated by concerns regarding potential tariff increases should there be a Trump presidency, which could negatively impact demand for New Zealand's key commodities, further pressuring the currency.
The correlation between NZD/USD and AUD/USD, stemming from shared geographical and economic factors, implies that any shifts affecting the Australian dollar could also influence the kiwi's performance. Observers note that the NZD to FJD exchange rate has recently hit a 14-day low near 1.3498, reflecting a slight decline from its three-month average of 1.3418. This low level is within a relatively stable range, trading between 1.2899 and 1.3742 over the past three months.
In contrast, the Fijian dollar (FJD) may benefit from a robust tourism recovery, with forecasts indicating a potential increase in annual tourists to Fiji, which could bolster the country's economy significantly. By the end of 2024, it is anticipated that the tourism sector could grow into a $FJD3 billion industry, driven by new markets. This economic growth and increased investments in infrastructure to support tourism could lend strength to the FJD.
As a result, market participants should closely monitor both NZD's exposure to external economic factors, including tariffs and commodity demand, as well as the FJD's growth prospects in tourism. The interplay between these currencies suggests that those engaged in international transactions should prepare for continued volatility in the NZD to FJD exchange rate in the coming months.