Bias: The NZD/XPF is currently bullish-to-range-bound, as it sits 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's recent policy easing contrasts with the stability of the CFP Franc due to its peg to the euro, impacting exchange rates.
• Risk/commodities: Ongoing caution in global markets is keeping risk-sensitive currencies like the NZD under pressure, which could lead to volatility.
• One macro factor: The uncertainty surrounding US tariffs on New Zealand exports raises concerns about future economic stability for the NZD.
Range: Expect the NZD/XPF to hold steady, with potential minor movements as it operates within a narrow recent range.
What could change it:
• Upside risk: A recovery in global risk appetite could boost the NZD significantly.
• Downside risk: Continued trade tensions or further easing by the RBNZ could push the NZD lower.