The recent forecasts for the NZD to MYR exchange rate indicate a generally bearish outlook for the New Zealand dollar, influenced by several key economic factors. The NZD has faced downward pressure due to a cautious market mood and a strengthening USD, leading to a decline in its value. Analysts suggest that if the risk-off sentiment continues, further losses for the kiwi may occur.
Recent data reflects a softening labor market in New Zealand, with the unemployment rate rising to 5.2% and a slight decline in employment. This trend is prompting expectations of a 25 basis-point interest rate cut by the Reserve Bank of New Zealand (RBNZ), which could weaken the NZD further. Additionally, the impact of global trade tensions, such as the 15% tariff imposed on New Zealand exports by the U.S., is adding to the downward pressure on the currency.
Inflation expectations appear stable, which may not prompt immediate monetary policy changes, but ongoing assessment of the U.S. Federal Reserve's interest rate policies will be crucial as anticipated rate cuts in the U.S. may lead to increased volatility in global risk sentiment, affecting the NZD’s performance.
In contrast, the Malaysian Ringgit (MYR) is facing its own challenges, including a significant 24% tariff on U.S. imports which raises concerns about economic stability. However, anticipated Federal Reserve rate cuts could weaken the USD, potentially benefiting the MYR. Oil prices also play a vital role, with Malaysia's economy being heavily reliant on oil exports. Recent movements show oil prices trading at $65.85, which is 3.8% below their three-month average. Given that oil prices can heavily influence the MYR’s performance, ongoing volatility in this sector remains a concern.
At present, the NZD to MYR exchange rate stands at 2.4958, which is 1.7% below its three-month average of 2.539. Having traded within a stable 3.3% range, the exchange rate may continue to reflect the interplay of these domestic and global economic factors. As both currencies respond to changing market dynamics, individuals and businesses engaging in international transactions should remain vigilant to these developments to optimize their currency exchanges.
