NZD/FJD Outlook: The exchange rate is likely to increase, trading at 90-day highs and well above its recent average.
Key drivers:
• The Reserve Bank of New Zealand's recent rate cut aims to stimulate growth, putting downward pressure on the NZD against the FJD.
• The Fijian Dollar benefits from a positive growth forecast, which may enhance its attractiveness compared to the NZD.
• Upcoming elections in New Zealand could create uncertainty, impacting the NZD's stability as policy changes are expected.
Range: The NZD/FJD is likely to test extremes within the current 3-month range while maintaining upward momentum.
What could change it:
• Upside risk: Improved global economic conditions could boost NZD demand.
• Downside risk: A slowdown in New Zealand’s economy may further weaken the NZD relative to the FJD.