NZD/ZAR Outlook:
The NZD/ZAR is slightly positive and likely to move sideways as it trades just below its recent average and within a stable range. Current uncertainties in the market are limiting upward momentum.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand continues to hold a hawkish stance, maintaining a higher interest rate than the South African Reserve Bank, which recently cut its rate.
• Risk/commodities: The South African Rand has gained strength, benefiting from a rebound in gold prices, which are crucial for the country's economy.
• One macro factor: New Zealand's reported trade deficit in January is raising concerns that could weigh on the kiwi's performance.
Range:
The NZD/ZAR is likely to hold within its recent range, drifting without significant movements in either direction.
What could change it:
• Upside risk: A stronger-than-expected recovery in New Zealand's trade figures could support the NZD.
• Downside risk: Continued geopolitical tensions and their impact on global risk appetite may exert downward pressure on the NZD.
