NZD/SGD Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average and lacking a clear driver.
Key drivers:
- Rate gap: The Reserve Bank of New Zealand's potential interest rate cuts contrast with Singapore's robust economic performance, keeping the SGD relatively strong.
- Risk/commodities: High dairy prices have helped New Zealand's export earnings, which supports the NZD against the backdrop of commodity fluctuations.
- One macro factor: Renewed U.S.-China trade tensions could affect global trade dynamics, impacting the NZD's stability.
Range:
The NZD/SGD is likely to drift within its recent range, maintaining its current position without significant volatility.
What could change it:
- Upside risk: A sudden increase in global risk appetite could bolster the NZD if confidence improves.
- Downside risk: Further interest rate cuts by the RBNZ could put downward pressure on the NZD, weakening its position.
