NZD/XPF Outlook:
The outlook for NZD/XPF is slightly positive, but likely to move sideways, as the rate is above its recent average, yet lacks a single clear driver for further gains.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand maintains a hawkish stance with a high Official Cash Rate, while no major changes are expected from the CFP Franc side.
• Risk/commodities: With rising tensions between the US and Iran influencing market risk appetite, commodity prices like oil have seen fluctuations, affecting related currencies such as the NZD.
• One macro factor: Recent trade data showed a deficit for New Zealand, which could weigh on the kiwi against the XPF.
Range:
Expect NZD/XPF to hold within its recent range, exhibiting stable trading behavior with minor fluctuations.
What could change it:
• Upside risk: If global dairy prices continue to rise significantly, this could boost the NZD.
• Downside risk: A deterioration in New Zealand's trade balance may further affect the NZD negatively.