The NZD to WST exchange rate displays a bearish bias, following recent developments and forecasts.
Key drivers include:
- Interest rate differential: The Reserve Bank of New Zealand is expected to cut rates, with projections suggesting the Official Cash Rate may drop to 1.75% by mid-2026. This contrasts with the Central Bank of Samoa maintaining its current monetary policy.
- Economic growth: While the Samoan economy is projected to grow by 3.2%, expectations for the New Zealand economy are dampened by the anticipated rate cuts from the RBNZ.
- Risk sentiment: Market forecasts point to a weaker NZD against the AUD and dollars due to fading upside risks.
The near-term trading range indicates the NZD could remain around current levels, with a potential bounce but generally stabilizing within the recent 4.4% range. Upside risks could arise if global economic conditions improve significantly, while downside risks include continued negative outlooks for the NZD, influenced by global interest rate movements.