The market bias for the NZD to THB exchange rate is bearish. The interest rate differential is shifting, with expectations for rate cuts from the Reserve Bank of New Zealand which could weigh on the NZD. In contrast, the Thai Baht may benefit from a robust current account surplus and stable capital inflows, supporting its strength. Additionally, inflation concerns appear to be more pressing for Thailand than for New Zealand, as the Thai economy grapples with multiple growth challenges.
The near-term trading range is likely to remain stable given the recent performance of the NZD, with fluctuations expected within a relatively steady band. However, markets show the NZD trading 1.2% below its three-month average, indicating potential for further declines.
An upside risk could emerge if New Zealand's export figures indicate a strong recovery, while a downside risk is the impact of geopolitical tensions or further weakness in global commodity prices, particularly oil, which has recently shown volatility.
