The New Zealand dollar (NZD) has shown signs of weakness recently, slipping against the Taiwanese dollar (TWD) as market risk appetite declined. Analysts note that despite an unexpected improvement in domestic business confidence, this has been overshadowed by broader market trends, leading to a 7-day low for the NZD at approximately 17.60 TWD, which is 0.9% below its 3-month average of 17.76 TWD. The currency has been trading within a stable range, between 17.53 and 18.11, for the last three months.
Key developments in New Zealand include the Reserve Bank of New Zealand's (RBNZ) decision to cut the official cash rate by 50 basis points to 2.5% in reaction to economic challenges and a rise in inflation to 3%. The central bank anticipates inflation will moderate towards 2% by mid-2026, underscoring a cautious outlook. Furthermore, news of upcoming adjustments to home lending rules indicates an effort to bolster economic growth, which may affect the NZD's value moving forward.
On the other hand, the TWD benefits from Taiwan's robust economic underpinning, with the central bank raising its growth forecast to 4.55% due to strong exports, particularly in the semiconductor sector. The TWD has previously demonstrated appreciation against other currencies, such as the USD. Currently, concerns about currency strength impacting exporters may pose risks, yet the TWD's overall performance remains positive.
Forecasters emphasize that the movements in the NZD to TWD exchange rate will likely remain influenced by the interplay of local economic policies and global risk sentiment. As the Reserve Bank of New Zealand implements further monetary easing while Taiwan benefits from a robust export-driven economy, the NZD could face ongoing pressure unless there is a notable shift in market dynamics or domestic conditions improve significantly.
