The New Zealand Dollar (NZD) is experiencing a mixed outlook as it approaches the end of 2025. Recent analyses indicate that various influences, including anticipated interest rate cuts and economic conditions, are likely to shape its performance.
In September 2025, Bank of America suggested that the NZD might weaken against the Australian dollar (AUD) and forecasted that the AUD/NZD exchange rate could rise to 1.20 by mid-2026. This outlook reflects declining upside risks for the NZD and expectations of rate cuts by the Reserve Bank of New Zealand (RBNZ). Additionally, Bank of America has adjusted its forecast for the RBNZ's Official Cash Rate, now projecting a terminal rate of 1.75% by mid-2026, partly resulting from a recent 25 basis point cut and further anticipated reductions.
Conversely, ANZ projected a more promising outlook for the NZD against the US Dollar (USD), expecting it to appreciate to 0.62 by the end of 2025 and rise further to 0.64 by the end of 2026. This forecast is based on anticipated weaknesses in the US economy and possible Federal Reserve rate cuts. Meanwhile, TD Securities has forecasted a potential recovery for the NZD in 2026, predicting gains of 7-8% driven by improved global growth and a weaker US dollar.
Current data shows the NZD to USD trading near 30-day lows at 0.5733, reflecting a stable range of 4.5% over the last three months. against the Euro (EUR), the NZD stands at 0.4927, maintaining a stable position within a 2.5% range around its average. The NZD to GBP is also at 30-day lows near 0.4275, just slightly below its three-month average. In contrast, the NZD to JPY is showing some strength, trading at 90.52, which is above its three-month average of 88.84.
In summary, the outlook for the NZD is characterized by conflicting signals: while some analysts foresee a weakening trend due to rate cuts, others anticipate a recovery influenced by a more favorable global economic climate. Businesses and individuals engaging in foreign exchange transactions should stay attentive to these developments, as they can play a significant role in exchange rates going forward.
