Bias: The NZD/USD is bullish-to-range-bound, currently above the 90-day average and in the upper half of the 3-month range.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand is easing rates, while the US Federal Reserve's more cautious approach to rate cuts supports a stronger USD.
• Risk/commodities: High volatility in oil prices could pressure commodity-linked currencies like the NZD as global risk aversion impacts appetite for risk-sensitive assets.
• Global trade tensions: Ongoing US tariffs on New Zealand exports are raising concerns over potential impacts on the NZD, which could weigh on its value.
Range: The NZD/USD is likely to hold within its recent range, subject to fluctuations based on the aforementioned drivers.
What could change it:
• Upside risk: A positive shift in global economic data could improve risk appetite, supporting the NZD.
• Downside risk: Continued US dollar strength due to robust labor market data might further pressure the NZD.