NZD/HKD Outlook: The outlook for NZD/HKD is slightly positive, but likely to move sideways as it trades significantly above its recent average and within the mid-range of its three-month movement.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand is poised for potential tightening due to rising inflation, while the Hong Kong Monetary Authority is focused on maintaining its dollar peg, creating a favorable rate gap for NZD.
• Risk/commodities: Global risk appetite is improving, and positive economic indicators are supporting a stronger NZD, while HKD remains under pressure from low interest rates.
• One macro factor: Rising consumer and business confidence in New Zealand suggests continued economic growth, which is likely to support the NZD.
Range: NZD/HKD is expected to hold within its recent range as it balances higher inflation expectations against HKD stability.
What could change it:
• Upside risk: A significant increase in interest rates from the RBNZ could further strengthen the NZD.
• Downside risk: Any sharp deterioration in global risk appetite could weaken the NZD relative to the HKD.
