The New Zealand dollar (NZD) has experienced recent volatility, mainly driven by shifts in market risk sentiment. Analysts emphasize that the NZD is vulnerable to risk aversion, leading to a drop in value before it managed to recover some losses. Market participants are keenly awaiting the release of the manufacturing PMI data, which could further influence the NZD's trajectory. Economists note that risk appetite will play a crucial role in determining the currency's performance moving forward.
Concerns surrounding potential economic shifts, such as the implications of a possible second Trump presidency, also loom large. This scenario could result in the implementation of new tariffs against critical trading partners like Europe and China, potentially dampening demand for key New Zealand commodities. With the NZD often moving in tandem with the Australian dollar (AUD) due to their geographic and commodity market linkages, any significant developments in either economy could impact the exchange rate.
Turning to the Philippine peso (PHP), the currency is facing its own challenges. Recent actions by the US government, imposing a 17% reciprocal tariff on goods from the Philippines, add pressure to an already vulnerable currency. Forecasters at ABN Amro highlight that the peso may further depreciate against the US dollar in 2025, largely attributed to deteriorating external balances and an overvalued currency. Additionally, political turmoil, stemming from the arrest of former President Rodrigo Duterte, raises concerns about stability in the upcoming mid-term elections, potentially exacerbating uncertainties in the market.
The exchange rate for NZD to PHP currently sits at 33.75, which is 1.8% above its three-month average of 33.15. This marks a relatively stable trading range of 6.9%, oscillating between 31.79 to 33.97. Given these factors, market analysts suggest that fluctuations in both the NZD and PHP may continue as traders respond to geopolitical developments, central bank policies, and broader economic indicators. Investors are advised to remain vigilant and consider these dynamics when planning international transactions.