NZD is underperforming all major currencies and faces – BBH

New Zealand Dollar (NZD) is underperforming all major currencies and faces additional downside risk in the short-term, BBH FX analysts report.

NZD faces additional downside risk in the short-term

"The RBNZ is widely expected to slash the policy rate 25bps to 2.75% (9:00pm New York). The swaps market implies 45% probability of a bigger 50bps cut to 2.50%. The steeper downturn in New Zealand Q2 real GDP leaves scope for the RBNZ to front-load rate cuts."

"In August, the RBNZ stressed 'there is scope to lower the OCR further,' and projected one 25bps cut by December and another 25bps cut over H1 2026, implying the policy rate would settle around 2.50%. No Monetary Policy Statement is tied to this meeting. The next one is due November 26."