NZD/THB Outlook: The New Zealand dollar (NZD) is likely to increase, trading above its recent average and near recent highs, supported by improving market conditions.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand's interest rate cuts create a stark contrast to the Bank of Thailand's recent policy easing, favoring the NZD.
• Risk/commodities: Rising oil prices could support the NZD, as higher commodity prices often bolster currencies of commodity-exporting nations, including New Zealand.
• Economic growth projections: Thailand's economy is expected to grow below potential, which may weaken the Thai Baht (THB) further.
Range: NZD/THB is likely to hold within its recent range, with the potential to test higher levels if positive momentum continues.
What could change it:
• Upside risk: A strong rebound in New Zealand's economic data could strengthen the NZD.
• Downside risk: If global trade tensions worsen, it may negatively impact NZD, particularly against the THB.