NZD/WST Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average with mixed signals affecting future movements.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand is considering interest rate cuts, while the Central Bank of Samoa focuses on reducing excess liquidity.
• Risk/commodities: High dairy prices are boosting New Zealand’s export income, supporting the NZD amid fluctuating risk appetite in the global market.
• One macro factor: New Zealand’s trade relations benefited from recent tariff reductions by the U.S. on a significant share of its exports.
Range:
Expect the NZD/WST to hold within its 3-month range but without dramatic shifts.
What could change it:
• Upside risk: Strong economic data from New Zealand indicating growth could bolster the NZD further.
• Downside risk: Continued global trade tensions impacting New Zealand's exports may weigh on the NZD's strength.