RBNZ was appointed in New Zealand to reduce interest rates for the sixth time in a row
- The New Zealand Reserve is expected to cut the interest rate of 25 bits per second to 3.25 % on Wednesday.
- The rate is completely reduced. Updated RBNZ predictions, Acting Governor Hwkesby’s Complex.
- RBNZ policy ads have been set to increase volatility around the New Zealand dollar.
It is widely expected that the Reserve Bank in New Zealand (RBNZ) will reduce the official money price (OCR) by 25 basis points (BPS) to 3.25 % from 3.50 % after the end of its monetary policy meeting on Wednesday. The decision will be announced at 02:00 GMT and will be followed by the RBNZ Cristianian Hoksby, at 03:00 GMT.
The New Zealand dollar (NZD) is likely to suffer from severe fluctuations to RBNZ policy ads and a new set of quarterly economic expectations.
What do you expect from the RBNZ interest rate?
As the interest rate is completely closed, all eyes will remain on the expectations for the letters of the letters published in the MPS statement for more hints on the RBNZ path forward on interest rates.
MPS February has suggested the OCR path by 3.1 % by the first quarter of 2026.
Since then, developments in the American customs tariff and uncertainty over global economic expectations have increased the negative risks of New Zealand growth.
Therefore, the descending review of the optical recognition path on the letters on the Sub-3 % will not surprise the markets. The markets are currently pricing by 60 % that RBNZ will decrease the definition knowledge to 2.75 % by the end of the year, for each Herald NZ.
In the April policy statement, the Central Bank indicated, “Since the extent and impact of definition policies becomes more clear, the committee has a scope to reduce the Irrivist vehicle more, as necessary.”
“Future policy decisions will be determined by expectations for an average inflation pressure,” as stated in the statement.
The inflation increased, as measured by the Consumer Prices Index (CPI), by 2.5 % on an annual basis in the first quarter (Q1), compared to an increase of 2.2 % seen in the fourth quarter 2024, according to the latest data published by New Zealand on April 16. Reading won 2.3 %.
The latest survey of RBNZ cash terms showed that inflation expectations in New Zealand (NZ) rose to 2.29 % in the second quarter of 2.06 % in the first quarter.
Although the central bank has left the door open for more price cuts, high inflation levels can raise questions about the timing of the next rate reduction, which can happen either in July or August.
In this light, RBNZ can switch to data dependence mode amid constant uncertainty on American tariff policies.
How will the RBNZ interest rate affect the New Zealand dollar?
The NZD/USD pair reached its highest level on a year’s top date 0.6000 on Monday in the countdown to the risk of RBNZ event. The US dollar’s continuous weakness due to local financial concerns and the tariff for US President Donald Trump along the spouses.
Kiwi’s pair can witness a decrease in profit reservation if RBNZ explicitly indicates a reduction in another rate in July while recognizing negative dangers on economic expectations.
In addition, the classification can be read on the course of optical recognition of the letters for this year and the first quarter of 2026 clearly as Dovish, and weighs heavily on the New Zealand dollar.
On the other hand, NZD can see the continuous bullish path if RBNZ is hinting at a temporary stop at the next meeting amid fears about sticky inflation.
Dhwani Mehta, the main analyst of the Asian session in FXSTREET, introduces a brief artistic look for NZD/USD and explains:
“Drazated risks appear to the bullish direction of the NZD/USD husband where the 24 -day relative indicator (RSI) remains much higher than the midfield. Buyers need to accept higher level of the circuit 0.6000 for the continuous upward arrangement.
“If the corrective decrease of 2025 is high, the steam collects, the initial support is aligned on the simple 21 -day moving average (SMA) at 0.5931, where SMA will be seen for 200 days at 0.5877.
The price of the New Zealand dollar is the last 7 days
The table below shows the percentage of the NZD dollar change (NZD) against the main currencies listed in 7 days. The New Zealand dollar was the strongest against the US dollar.
| US dollar | euro | GBP | JPY | CAD | Aud | Nzd | Chf | |
|---|---|---|---|---|---|---|---|---|
| US dollar | -1.26 % | -1.52 % | 1.19 % | -1.53 % | -0.41 % | -1.01 % | 1.67 % | |
| euro | 1.26 % | -0.25 % | 0.07 % | -0.27 % | 0.87 % | 0.27 % | -0.41 % | |
| GBP | 1.52 % | 0.25 % | 0.31 % | -0.03 % | 1.09 % | 0.53 % | -0.13 % | |
| JPY | 1.19 % | -07 % | -0.31 % | -0.35 % | 0.78 % | 0.17 % | -0.43 % | |
| CAD | 1.53 % | 0.27 % | 0.03 % | 0.35 % | 1.14 % | 0.53 % | -11 % | |
| Aud | 0.41 % | -0.87 % | -1.09 % | -0.78 % | 1.14 % | -59 % | -1.24 % | |
| Nzd | 1.01 % | -0.27 % | -53 % | -0.17 % | -53 % | 0.59 % | -65 % | |
| Chf | 1.67 % | 0.41 % | 0.13 % | 0.43 % | 0.11 % | 1.24 % | 0.65 % |
The heat map shows the percentage changes in the main currencies against each other. The basic currency is chosen from the left column, while the quotation currency is chosen from the top row. For example, if you choose the New Zealand dollar from the left column and move along the horizontal line to the US dollar, the percentage offered in the box will represent NZD (Base)/USD (Quote).
Common questions about the New Zealand dollar
The New Zealand dollar (NZD), also known as Kiwi, is a well -known trading currency among investors. Its value is widely determined by the health of the New Zealand economy and the country’s central bank policy. However, there are some unique characteristics that can make NZD move. The performance of the Chinese economy tends to move kiwi because China is the largest commercial partner in New Zealand. The bad news of the Chinese economy is likely to mean exports less than New Zealand to the country, and thus strike the economy. Another factor moves NZD is dairy prices because the dairy industry is the main export of New Zealand. High dairy prices enhance export income, and contribute positively to the economy and thus to NZD.
The Reserve Bank in New Zealand (RBNZ) aims to achieve and maintain the rate of inflation between 1 % and 3 % in the medium term, focusing on keeping it near the mid -2 % point. To this end, the bank determines an appropriate level of interest rates. When inflation is very high, RBNZ will increase interest rates to cool the economy, but this step will make bond returns higher, which increases investor calls to invest in the country and thus enhance NZD. On the contrary, low interest rates tend to weaken NZD. A comparison of the so -called virtuous rate, or how to compare rates in New Zealand can compare it to the one set by the American Federal Reserve, a major role in transferring the NZD/USD pair.
New Zealand’s macroeconomic data versions are the key to assessing the state of the economy and can affect the evaluation of the New Zealand dollar (NZD). The strong economy, based on high economic growth, is a decrease in unemployment and high confidence is good for NZD. Higher economic growth attracts foreign investment and may encourage the New Zealand Reserve to increase interest rates, if this economic power corresponds to high inflation. On the contrary, if economic data is weak, NZD is likely to decrease.
The New Zealand dollar (NZD) tends to strengthen during risk periods, or when investors see the wider market risk that is low and optimistic about growth. This tends to lead to a more convenient look of goods and so -called “commodity currencies” like Kiwi. On the contrary, NZD tends to be weak in times of turmoil in the market or economic uncertainty where investors tend to sell high -risk assets and flee to the most resigned safe havens.
