The New Zealand dollar (NZD) has shown resilience recently, supported by a risk-on sentiment in the broader markets. Analysts highlight that the NZD gained ground as investors remained optimistic, which could lead to further appreciation if the positive mood continues. In the near term, the NZD may continue to be subject to fluctuations based on market risk appetite, especially given the limited domestic data available to influence its trajectory.
However, external factors pose potential challenges. The political landscape in the United States, particularly the prospect of a second Trump presidency, raises concerns over heightened tariffs, particularly for major trading partners like Europe and China. Analysts suggest that increased tariffs could depress demand for New Zealand's key commodities, which may negatively impact the NZD's strength in the long run.
On the Taiwan dollar (TWD) front, recent developments have also raised caution. The US has implemented a significant 32% reciprocal tariff on goods from Taiwan amid escalating trade tensions, which could weigh heavily on the TWD. Furthermore, a potential slowdown in the global technology sector could adversely affect Taiwan's economy, given its substantial reliance on technology and semiconductors. Geopolitical tensions between China and Taiwan further exacerbate the risk of instability for the TWD, suggesting fluctuations ahead.
In recent trading, the NZD to TWD exchange rate has reached 14-day highs near 17.75, which is only 0.7% below its three-month average of 17.88. This has been part of a volatile trading environment, with the pair moving within an impressive 11.5% range from 17.41 to 19.42. Forecasters indicate that traders should remain vigilant as ongoing geopolitical tensions and changing market sentiments could lead to further volatility in the NZD/TWD exchange rate.