NZD/HKD Outlook:
The NZD/HKD is currently positioned 2.5% above its 90-day average, near recent highs. Despite some volatility, recent trends in New Zealand's export conditions may provide support for the kiwi.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand has signaled a willingness to maintain low rates, while Hong Kong's monetary authority actively intervenes to stabilize its currency.
• Risk/commodities: Global commodity prices are on a decline, which could impact New Zealand's export revenues, affecting the NZD.
• One macro factor: The forecast improvement in New Zealand business confidence is expected to bolster the NZD's performance today.
Range:
The NZD/HKD is likely to drift within its recent trading range, potentially testing the upper extremes.
What could change it:
• An upside risk could arise from stronger-than-expected business confidence data in New Zealand.
• A downside risk may include further declines in global commodity prices impacting the NZD's value.