Bias: The bias for NZD/INR is bullish-to-range-bound, as the rate is above the 90-day average and in the upper half of the 3-month range.
Key drivers:
- Rate gap: The Reserve Bank of New Zealand is cutting rates to support growth, while the Reserve Bank of India is intervening to stabilize the rupee, widening the rate gap against the NZD.
- Risk/commodities: With oil prices trending higher, the cost pressures may impact the INR negatively while benefiting commodity-exporting countries like New Zealand.
- Macro factor: Ongoing trade tensions, particularly U.S. tariffs affecting both countries, are likely to influence currency values moving forward.
Range: Expect NZD/INR to hold its current position near recent highs, but fluctuations within the stable 3-month range can occur.
What could change it:
- Upside risk: Stronger-than-expected economic data from New Zealand could push NZD/INR higher.
- Downside risk: Continued capital outflows from Indian markets may lead to a depreciation of the INR against the NZD.