NZD/USD Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand has hinted at potential interest rate cuts, contrasting with the Federal Reserve's decision to hold rates steady, which widens the monetary policy gap.
• Risk/commodities: High dairy prices have provided support for the NZD, reflecting strong demand in global markets.
• Trade relations: The U.S. recently lifted tariffs on several New Zealand exports, potentially enhancing trade flows and supporting NZD's strength.
Range:
Movement is likely to hold within the recent 3-month range, showing resilience but limited momentum.
What could change it:
• Upside risk: A positive surprise in U.S. jobless claims could shift focus back on the USD, weakening the NZD.
• Downside risk: An announcement from the RBNZ regarding immediate interest rate cuts could pressure the NZD lower.
