New Zealand Dollar

The New Zealand Dollar is one of the stronger currencies right now, ranking #2 of eight with a score of +20. The biggest tailwind is interest rates. With a short-term rate around 3.0%, the New Zealand Dollar offers a meaningful yield advantage over most of its peers, which tends to attract capital into the currency. Broader risk appetite is positive, which helps the New Zealand Dollar. As a currency tied to global growth and trade activity, it tends to strengthen when investors feel confident and weaken when they retreat to safety. On the commodity side, firm prices for farm goods like dairy are providing a clear boost. Strong export revenues support the currency through the balance of payments and improve the terms of trade. On a valuation basis, it looks cheap versus its own one-year range, which may help cushion the downside from here.