The New Zealand dollar (NZD) has been under pressure recently, trending lower amid a cautious market sentiment. Analysts have pointed out that there is limited economic data available to support the NZD, leaving it vulnerable to further declines if negative sentiment persists. As of now, the NZD to New Taiwan dollar (TWD) exchange rate has reached a 90-day low near 17.44, which is approximately 1.7% below its three-month average of 17.75. The trading range has remained stable, fluctuating between 17.44 and 18.11.
In recent developments affecting the NZD, New Zealand's inflation reached 3% in the third quarter of 2025, aligning with expectations and hitting the upper limit of the Reserve Bank of New Zealand's (RBNZ) target range. This increase has been driven by rising costs in electricity, rent, and local government taxes. Coupled with this, the RBNZ's decision to cut interest rates by 50 basis points to 2.5% indicates a proactive approach to stimulate the economy amidst data that points to economic weakness. The central bank anticipates inflation to moderate to approximately 2% by mid-2026.
Meanwhile, the TWD has seen appreciation, largely attributed to Taiwan's robust economic growth forecast, which has been raised to 4.55%. The central bank has maintained the benchmark interest rate at 2%, reflecting stability in monetary policy. The ongoing strength of the TWD is also attributed to Taiwan's strong export performance, particularly in the semiconductor sector, which has led to concerns about reduced competitiveness for exporters, including technology firms.
As both currencies experience significant influences from their respective central banks and economic conditions, the future direction of the NZD/TWD exchange rate may hinge on both the RBNZ's monetary policy and Taiwan's export performance. Analysts remain cautious about the NZD's ability to gain ground against the TWD in the short term, particularly given its recent downturn and the TWD's relative strength amid favorable economic forecasts for Taiwan.
