The New Zealand dollar (NZD) has faced challenges recently, particularly in the wake of unexpected GDP growth figures that failed to significantly impact market expectations for the Reserve Bank of New Zealand's (RBNZ) monetary policy. Forecasters suggest that while stronger trade figures could provide some support to the NZD, the currency's overall trajectory is increasingly influenced by broader economic factors. Analysts note that the RBNZ's decision to cut the Official Cash Rate (OCR) by 50 basis points in October 2025 to stimulate a sluggish economy has conveyed a dovish posture, which could lead to further cuts by year-end.
Additionally, the widening interest rate differential between the RBNZ's easing policies and the U.S. Federal Reserve's hawkish stance has exerted further downward pressure on the NZD. Although commodities like dairy and beef have seen price support thanks to global demand, the currency's depreciation is eroding potential gains in export revenues. Recent recovery in manufacturing, evidenced by an uptick in the Performance of Manufacturing Index, may offer some optimism but remains overshadowed by these pressing challenges.
Conversely, the Malaysian ringgit (MYR) is experiencing a favorable phase, having appreciated over 8% in 2025. This strength is driven by a weaker U.S. dollar and robust economic performance, with GDP growth surpassing expectations in the third quarter. With Bank Negara Malaysia maintaining a stable Overnight Policy Rate at 3.00%, confidence in the MYR's resilience is bolstered. The ringgit's performance has also benefitted from improved trade relationships, particularly following a reciprocal trade agreement with the U.S.
Price data reveals that the NZD to MYR exchange rate currently sits at 2.3631, which is 1.0% below its three-month average of 2.3869, reflecting a stable trading range of 6.0% over the past months. The MYR's robustness may continue to challenge the NZD, particularly as the NZD struggles to maintain momentum against a backdrop of significant economic policy shifts.
Additionally, oil prices are impacting both currencies; the recent OIL to USD price is at 60.89, about 3.9% below its three-month average of 63.35, having experienced a volatile range from 59.04 to 70.13. Given Malaysia's status as a significant oil producer, fluctuations in oil prices could have direct implications for the MYR's valuation, enhancing its attractiveness as NZD faces headwinds from domestic and international pressures.
