The USD to NZD exchange rate displays a bearish bias in the near term.
Key drivers include:
- The expectation of multiple rate cuts by the Federal Reserve, leading to a weaker USD.
- A stable New Zealand economy, with projections for RBNZ rate cuts suggesting potential NZD vulnerabilities.
- Improving global economic growth and rising commodity prices, which could support NZD strength.
The near-term trading range is anticipated to remain stable, with fluctuations around current levels as the USD nears its recent 7-day high.
Upside risks could stem from unexpected strong U.S. economic data or a delay in Fed rate cuts. Conversely, downside risks may arise from adverse developments in New Zealand's economic outlook or a stronger-than-expected rebound in the U.S. dollar, capping NZD gains.