Markets anticipated further rate cuts on RBNZ in the November meeting, which continue weighing on NZD. In contrast, the potential escalation of Middle East tension could continue to benefit the CHF as its safe heaven attribute.

NZD: Further downside?

Bloomberg’s commodity price index has already fallen to fresh year-to-date lows this week sending a bearish signal for commodity currency performance such as the NZD. Markets do not expect this week’s rebound to prove sustainable for the NZD. At the same time, expect the RBNZ to deliver a bigger dovish shift and bring forward plans for rate cuts in response to the weak performance of New Zealand’s economy and slowing inflation.

CHF: Grind lower as risk conditions normalize

The CHF should continue to perform well in more challenging conditions for risk assets which have triggered an unwind of carry trades.

NZD/CHF 4H

Currency Strength between NZD & CHF

Currency Strength between NZD & CHF

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