NZD/USD: RBNZ in focus tomorrow – OCBC

Consensus is for 25bp cut to bring OCR to 3%. Slowing growth, weaker labour market, easing inflationary pressure and falling consumer confidence suggest that a 25bp cut is a done deal. NZD was last at 0.5917 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Daily momentum is not showing a clear bias

"Question lies in whether this is the final one and done (less likely) or will RBNZ OCR projection point to further cuts. To recap, RBNZ has already lowered rates by 225bp since easing cycle started in August 2024. As of May MPS, 2.9% was RBNZ’s cycle low projection while OIS last priced in 2.75% by April 2026 (i.e. one more cut assuming RBNZ cut rate tomorrow)."

"To some extent, a somewhat dovish cut is the base case for now. But will RBNZ project for more cut after the Wed cut or will they signal that the end of easing cycle is near? Signalling the nearing of an end may result in 'sell rumour, buy the fact'."

"Daily momentum and RSI indicators are not showing a clear bias. Support at 0.5880 (38.2% fibo retracement of 2025 low to high), 0.5810/30 levels (200 DMA, 50% fibo). Resistance at 0.5950 (21, 100 DMAs), 0.5970 (23.6% fibo)."