NZD/VND Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver to push it higher.
Key drivers:
• Rate gap: The difference between the Reserve Bank of New Zealand's potential monetary tightening due to rising inflation and the stable monetary policy of the State Bank of Vietnam supports a stronger NZD.
• Risk/commodities: Improved global risk appetite, driven by easing trade tensions, has generally supported the New Zealand Dollar, making it attractive against the VND.
• One macro factor: with Vietnam's GDP expected to grow significantly, the outlook for the VND might shift depending on upcoming legislative elections and related economic policies.
Range: Expect the NZD/VND to drift within its recent range, potentially testing the upper limits but not breaking through decisively.
What could change it:
• Upside risk: Accelerated monetary tightening from the RBNZ could lead to a stronger NZD.
• Downside risk: Any adverse economic developments in Vietnam or a shift to more aggressive easing by the RBNZ would weaken the NZD against the VND.
