NZD/VND Outlook:
Slightly positive, but likely to move sideways as the NZD is above its recent average but lacks a clear driving force.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand is signaling potential interest rate cuts, while the State Bank of Vietnam's policies remain stable, narrowing the interest rate advantage for NZD.
• Risk/commodities: High dairy prices have positively impacted New Zealand's export income, which has provided support for the NZD.
• One macro factor: The U.S. recently lifted tariffs on numerous New Zealand food products, which could enhance New Zealand's trade position.
Range:
Expect the NZD/VND to drift within its recent range, as recent movements suggest limited momentum.
What could change it:
• Upside risk: Unexpected stronger-than-expected economic data from New Zealand could bolster the NZD.
• Downside risk: Continued labor market concerns in New Zealand may weaken the NZD further.