The New Zealand dollar (NZD) has shown muted performance despite an overall risk-on sentiment in the markets. Analysts note that the NZD has struggled against currencies like the Australian dollar due to a lack of support from recent positive market movements. A vital factor influencing the NZD moving forward will be the upcoming consumer confidence results from New Zealand, which may provide insights into consumer sentiment and economic health.
Expectations around geopolitical dynamics, especially regarding potential tariffs under a renewed Trump presidency, are creating anxiety for the NZD. An increase in tariffs could dampen demand for key exports, ultimately affecting the New Zealand dollar's strength against other currencies. In terms of correlation, NZD and AUD often move in tandem due to their close economic relationship and shared reliance on commodity markets.
On the Philippine peso (PHP) front, the recent implementation of a 17% tariff by the U.S. on Philippine goods as part of an escalating trade conflict presents additional pressure. Forecasters at ABN Amro highlight concerns about the Philippine peso's valuation, indicating a potential depreciation against the U.S. dollar in the coming years due to weak external balances. The political landscape, particularly with the former president's legal troubles affecting upcoming mid-term elections, is contributing to market uncertainty.
The NZD to PHP rate currently stands at 34.26, a notable 2.8% above its three-month average of 33.34. The exchange rate has demonstrated considerable volatility, with fluctuations between a low of 31.79 and a high of 34.43 over this period. This volatile behavior may reflect traders' reactions to both domestic developments in New Zealand and external geopolitical factors impacting the Philippines.
Overall, market participants should remain vigilant as both the NZD and PHP navigate a complex landscape shaped by external trade policies, election uncertainties, and their respective currency correlations.