The current market bias for the NZD to TWD exchange rate is range-bound.
Key drivers include the interest rate differential, with the Reserve Bank of New Zealand likely to reduce rates, which could weigh on the NZD. Additionally, Taiwan's central bank has committed to avoiding currency manipulation, adding stability to the TWD. Economic uncertainties remain, including Taiwan's increased investment in Latin America, which could influence currency dynamics.
In the near term, the NZD to TWD is expected to trade within a stable range, having recently been 1.5% above its three-month average and within a 5.8% fluctuation range.
Upside risks may come from a stronger-than-expected recovery in the New Zealand economy or improved global risk sentiment. Conversely, downside risks include deeper rate cuts from the RBNZ and persistent market volatility linked to international trade issues.