Snapshot: NZD/USD trades at 0.5898, up 0.97% on the day, after the RBNZ held rates at 3.50% but telegraphed further tightening. The central bank’s forward guidance points to a cash rate near 2.84% by year-end, implying at least two further 25bp hikes. Markets now await the 14:00 NZT RBNZ press conference for further details.
- A break above 0.5905 could open the path to 0.5950, but the path is risky.
- Watch for any dovish surprises from Governor Breman’s speech at 08:10 NZT or details in the Annual Budget Release (14:00 NZT), which could trigger a sharp reversal.
Bias into NY: The hawkish RBNZ stance should keep the Kiwi supported, with a test of the 0.5920 level likely. Despite some DXY weakness, domestic drivers are firmly in control.