RBNZ delivers hawkish cut, lifts NZD – ING

The New Zealand Dollar (NZD) strengthened after the RBNZ delivered a hawkish 25bp cut and signaled no further easing, prompting markets to price out additional rate reductions and supporting expectations of a near-term NZD/USD recovery, ING's FX analyst Francesco Pesole notes.

NZD rallies as RBNZ signals no further easing

"The Reserve Bank of New Zealand (RBNZ) matched our expectations for a hawkish cut overnight, prompting a rally in NZD. The 25bp reduction was accompanied by updated rate projections that showed no more rate cuts, and one member voted for a hold."

"The forward guidance has, as a central scenario, unchanged rates for the whole of 2026, although unsurprisingly the Committee is retaining some dovish conditionality ('If the OCR was to change over the next three to six months, it might be more likely to go down than up')."

"The NZD OIS curve has priced out additional easing, with only 5bp left in the curve by March. The notion that the RBNZ has maxed out its easing potential should support a recovery in NZD/USD, also in line with our bearish USD view. We continue to target a move above 0.570 in the near term."