Bias: Bearish-to-range-bound, as the NZD is near the 90-day average and in the lower half of the 3-month range.
Key drivers:
- Rate gap: The Reserve Bank of New Zealand is easing its policy, contrasting with the cautious stance of the Bank of England, which may support the GBP over the NZD.
- Risk/commodities: Oil prices have remained volatile, with fluctuations impacting the NZD as it is considered a risk-sensitive currency.
- Economic growth: The UK's GDP growth is projected to be low, but this may stabilize the GBP against the NZD if global risk aversion continues.
Range: The NZD/GBP is expected to drift within its recent range, likely remaining stable but susceptible to shifts based on broader market trends.
What could change it:
- Upside risk: A surprise positive economic report from New Zealand could strengthen the NZD.
- Downside risk: Continued global trade tensions, particularly related to tariffs, may further weaken the NZD.