NZD/TWD Outlook:
The NZD/TWD rate is currently above its recent average and is in a stable mid-range. Expectations of improved business confidence in New Zealand could provide support for the 'kiwi' today.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand is anticipated to leave interest rates stagnant for some time, which may weaken the NZD against the TWD.
• Risk/commodities: Global commodity price decline is forecasted, which may affect New Zealand's export revenues, putting downward pressure on the NZD.
• One macro factor: Taiwan's exports have surged significantly, enhancing the TWD's strength amid strong performance in the ICT and electronics sectors.
Range:
Expect the NZD/TWD to hold within its recent 3-month range of 17.99 to 19.14.
What could change it:
• Upside risk: A stronger-than-expected increase in New Zealand's business confidence could boost the NZD.
• Downside risk: Continued declines in dairy prices may further weaken the NZD against the TWD.