NZD/XPF Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driving factor.
Key drivers:
- Rate gap: The Reserve Bank of New Zealand has indicated potential interest rate cuts, which may pressure the NZD, while the XPF has remained relatively stable.
- Risk/commodities: Rising dairy prices have supported New Zealand's export income, bolstering the NZD's strength despite recent economic concerns.
- Global trade tensions: Ongoing tensions, particularly between the U.S. and China, may influence New Zealand's trade dynamics and the NZD's performance.
Range:
Expect the NZD/XPF pair to hold within its recent range, with possible fluctuations as it tests the higher levels observed.
What could change it:
- Upside risk: A rebound in global commodity prices could further enhance the NZD’s strength.
- Downside risk: Renewed geopolitical tensions impacting trade and the perception of risk could weigh down the NZD.