The New Zealand dollar (NZD) has shown vulnerability lately, particularly following a retreat linked to declining market risk appetite despite improvements in domestic business confidence. Analysts suggest that if this trend continues, the NZD may struggle to regain footing in the short term.
Recent developments have also significantly impacted the NZD's outlook. The Reserve Bank of New Zealand (RBNZ) recently cut the official cash rate by 50 basis points to 2.5% in response to rising inflation, which hit 3.0% in Q3 2025. This reduction is intended to stimulate the economy by addressing higher costs, particularly in electricity and housing. As the RBNZ projects a moderation in inflation by mid-2026, the NZD may be further pressured by expectations of lower interest rates, fueling concerns among investors.
In contrast, the Malaysian Ringgit (MYR) is benefiting from several supportive economic indicators. The U.S. Federal Reserve's recent rate cuts have weakened the U.S. dollar and strengthened the MYR, which remains resilient due to sustained GDP growth and healthy foreign investment inflows. Experts note Malaysia's robust trade surplus—MYR 16.1 billion in August 2025—and a cautious monetary policy stance by Bank Negara Malaysia, keeping its Overnight Policy Rate steady at 3.00%. These factors suggest a more favorable outlook for the MYR.
Currently, the NZD to MYR exchange rate is struggling, trading near 90-day lows at 2.3989, representing a 2.7% decline from its 3-month average of 2.4665. The NZD has fluctuated in a relatively narrow range, but recent trends indicate a significant downward movement. The overall stability of the MYR, bolstered by the discussions surrounding economic robustness, further complicates the NZD's position.
Additionally, fluctuations in oil prices could further influence both currencies, as the MYR is sensitive to oil price changes. Currently, oil trades at USD 65.07, which is slightly below its 3-month average. Given that oil has seen volatility within a 15% range, fluctuations in this market could have downstream effects on the MYR and, consequently, on the NZD to MYR rate.
Market analysts remain cautious, with several factors indicating potential further declines for the NZD against the MYR if current trends persist.
