NZD/FJD Outlook:
The NZD/FJD exchange rate is likely to move sideways as it is near its 90-day average and mid-range. Recent mixed signals from New Zealand’s economic indicators are contributing to this stability.
Key drivers:
- Rate gap: The Reserve Bank of New Zealand maintains a higher cash rate compared to the Reserve Bank of Fiji, supporting the NZD.
- Risk/commodities: Recent increases in dairy prices are favorable for New Zealand, enhancing its export position and supporting the NZD.
- One macro factor: New Zealand's trade deficit may weigh on the NZD, particularly following the recent trade figures release.
Range:
The NZD/FJD is likely to hold steady within its recent range, with potential for minor fluctuations.
What could change it:
- Upside risk: An unexpected strengthening in global dairy prices could uplift the NZD.
- Downside risk: A further deterioration in New Zealand’s trade performance might lead to NZD weakness.