The New Zealand dollar (NZD) has recently come under pressure, with analysts noting that a bearish market sentiment has significantly impacted its value. The NZD recently traded at 2.4895 MYR, marking a 1.5% drop from its three-month average of 2.527 MYR and illustrating a period of relative stability with fluctuations remaining within a 4.8% range between 2.4580 and 2.5754 MYR.
Key developments affecting the NZD include interest rate cuts by the Reserve Bank of New Zealand (RBNZ), which lowered the official cash rate to 3.00% in August, signaling potential further reductions. This dovish approach, aligned with a rise in unemployment to 5.2% and disappointing employment figures, has raised expectations for additional easing and further pressured the kiwi.
Simultaneously, the U.S. has imposed tariffs on New Zealand exports, heightening concerns about trade relations and the overall impact on the economy. The prevailing global economic uncertainties, compounded by softening labor market indicators, have enhanced the risk-off sentiment generally leading to the NZD's depreciation amid an environment where investors are favoring safer assets.
On the other hand, the Malaysian Ringgit (MYR) shows a slightly different trajectory. Bank Negara Malaysia’s recent decision to cut its Overnight Policy Rate (OPR) to 2.75% has also triggered concerns, but a Reuters poll indicates a stable outlook for rates through at least 2027, bolstering sentiment around the MYR. As the MYR is often sensitive to oil price fluctuations, recent oil values at near 90-day lows of approximately 65.50 USD have introduced volatility, moving 5.1% below its three-month average.
Overall, while the MYR's outlook reflects stability amid soft inflation and steady growth, the NZD faces substantial challenges from both domestic economic policies and broader external pressures. These dynamics are critical for traders and businesses engaged in international transactions, as the trajectory of both currencies could significantly impact exchange rates in the near term.
