The New Zealand dollar (NZD) rose after the Reserve Bank of New Zealand delivered a hawkish 25 basis point cut and signaled no further easing, leading markets to expect additional interest rate cuts and supporting expectations of a near-term recovery in the NZD/USD pair, noted Francesco Pesole, FX analyst at ING.
NZD rises as RBNZ signals no further easing
“The Reserve Bank of New Zealand (RBNZ) matched our expectations for a hawkish cut overnight, sending the New Zealand dollar higher. The 25 basis point cut was accompanied by an updated interest rate forecast that showed no further rate cuts, and one member voted to hold it.”
“Forward guidance, as a central scenario, rates are unchanged for all of 2026, although unsurprisingly the Commission retains some cautious conditions (“If the OCR rate changes over the next three to six months, it may be more likely to fall than to rise”).”
“The NZD OIS curve has accommodated further easing, with only 5 basis points remaining in the curve by March. The idea that the RBNZ has reached the limit of its easing potential should support a recovery in NZD/USD, which is also in line with our bearish view on the USD. We continue to target a move above 0.570 in the near term.”
