The exchange rate forecast for the New Zealand dollar (NZD) against the Malaysian ringgit (MYR) reflects a nuanced picture influenced by recent economic developments. Currently, the NZD trades at 2.3749 MYR, which is 1.6% lower than its three-month average of 2.4132 MYR, indicating volatility within a range of 8.6% from 2.3228 to 2.5235 MYR. Analysts note that while there has been an overall risk-on sentiment in the market, the NZD's performance has been mixed, primarily driven by external risk factors rather than significant domestic economic data.
The recent change in leadership at the Reserve Bank of New Zealand (RBNZ) has brought a focus on maintaining low and stable inflation, which Anna Breman emphasizes as a core mandate. The RBNZ recently cut its official cash rate to 2.25%, suggesting a more cautious approach moving forward unless economic conditions prompt further adjustments. This monetary policy stance, combined with an increasing inflation rate (reaching the upper limit of the target range at 3.0%), may keep the NZD under pressure as markets assess the implications for economic growth.
In contrast, the MYR has shown relative strength, appreciating to its highest level against the US dollar in over a year. Positive developments in Malaysia’s trade balance, particularly in electronics and commodities, alongside sustained foreign direct investment flows, have bolstered the MYR's position. Furthermore, the Malaysian government's efforts towards fiscal consolidation and new trade agreements post-ASEAN Summit have enhanced investor confidence.
Oil prices, which influence the MYR given Malaysia's status as an oil producer, currently show volatility, with OIL trading near its 14-day highs at approximately 63.75 USD, though still below its three-month average. Given the MYR's strong correlation with oil prices, any increase in oil value may further support the ringgit.
Overall, while the NZD may experience some support from a generally positive risk sentiment, analysts believe the MYR’s robust economic indicators and favorable external factors could continue to pressurize the NZD/MYR exchange rate in the near term. Investors may want to closely monitor forthcoming economic reports and geopolitical events that could shift market sentiment significantly.
