The exchange rate forecast for the New Zealand Dollar (NZD) against the Thai Baht (THB) indicates ongoing challenges for the NZD, which recently fell to 90-day lows around 18.42, significantly below its three-month average of 18.89. Analysts attribute this decline to a deteriorating risk appetite among investors, overshadowing positive domestic indicators, such as strong business confidence and yearly inflation reaching 3%, at the upper end of the Reserve Bank of New Zealand's (RBNZ) target range.
The RBNZ's recent decision to cut the official cash rate by 50 basis points to 2.5% in response to rising costs and economic weakness has further pressured the NZD. This move indicates that while inflation has climbed, the central bank is willing to support economic activity amid concerns of moderating growth. Easing home lending rules may help stimulate local economic activity but will take time to impact the currency directly.
Conversely, the Thai Baht is facing its own pressures, with government officials expressing concerns about the potential negative impacts of escalating US-China trade tensions that threaten Thailand's growth projections, expected at just 2.2% for 2025. Despite this, the Thai government and the Bank of Thailand are proactively working to manage the Baht's appreciation, which has reached its strongest level in four years. Their recent interventions aim to stabilize the currency and minimize adverse effects on exports and tourism.
Moreover, the recent volatility in oil prices, currently at 65.07 USD—1.7% below the three-month average—adds another layer of complexity for both currencies. The fluctuating oil prices can influence import costs and overall economic health for both nations, especially as Thailand is more reliant on exports.
In summary, the NZD to THB exchange rate outlook remains cautious, influenced by domestic economic policies in New Zealand and geopolitical tensions affecting Thailand. Market watchers should stay alert to any developments regarding central bank policies and external economic factors that could affect these currencies further.
