Snapshot: NZD/USD sits near $0.584, pressured by the RBNZ’s firmly intact easing bias and recent data pointing to weakening economic momentum. Orr signalled further easing at the last meeting if disinflation embeds, setting the stage for potential further downside. The next RBNZ meeting is on May 28.
- Watch for any signs of imported inflation or currency weakness that could prompt the RBNZ to reconsider its easing stance.
- Risk lies in stronger-than-expected US data during the NY session, which could further strengthen the USD and weigh on the Kiwi.
Bias into NY: Downside favoured in NZD/USD as the RBNZ’s dovish stance continues to weigh, with a potential target near the recent two-week low. USD strength is supported by US 10Y real yields at 2%, creating a headwind for risk assets.