The New Zealand dollar (NZD) has recently witnessed an upswing, driven by an optimistic market sentiment that has bolstered its value against several currencies. Analysts suggest that this risk-on mood could further support the 'kiwi,' especially if confidence in the global economy continues to strengthen. Currently, the NZD to Taiwan Dollar (TWD) exchange rate is experiencing a positive trend, hitting near 30-day highs around 17.82, which is above its three-month average.
However, several factors could influence future movements in the NZD. Analysts point out that geopolitical tensions, particularly regarding the potential for a Trump presidency and associated tariffs, pose risks to both New Zealand’s economy and its key trading partners. Stricter tariffs could dampen global demand for commodities, which would likely negatively impact the NZD.
On the other hand, the TWD faces its own set of challenges. Economists have highlighted that the US has imposed significant tariffs on Taiwanese goods, which could strain the economy. Furthermore, Taiwan's reliance on its robust technology and semiconductor sector makes it vulnerable to a global tech slowdown. The potential for heightened geopolitical tensions with China could also weigh on the TWD's stability.
With NZD and AUD often moving in tandem due to their geographical proximity and dependence on commodity markets, changes in the commodity landscape could likewise affect the NZD/TWD exchange rate. Over the past two months, the NZD to TWD has remained stable within a range of 17.45 to 18.11, and market reactions to ongoing geopolitical developments will be essential in determining its future trajectory.
