NZD/THB Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average, yet lacks a clear driver.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand is signaling potential rate cuts, contrasting with the Bank of Thailand's recent interventions to manage the baht's strength.
• Risk/commodities: High dairy prices are enhancing New Zealand’s export income, supporting the NZD amidst overall commodity price fluctuations.
• One macro factor: Ongoing U.S.-China trade tensions are affecting global supply chains and putting pressure on the NZD.
Range:
The NZD/THB is likely to drift within the recent range, without much volatility expected.
What could change it:
• Upside risk: A surprise increase in global risk appetite could boost the NZD further.
• Downside risk: Renewed concerns over inflation could lead to sharper rate cuts by the RBNZ, dragging the NZD lower.
