NZD edges lower ahead of RBNZ decision

The New Zealand dollar is steady on Tuesday. NZD/USD is trading at 0.6115, down 0.16% in the European session at the time of writing. The New Zealand dollar looked sharp last week against the slumping US dollar, climbing 0.88%.

Reserve Bank expected to hold rates again

The Reserve Bank of New Zealand is expected to hold its cash rate at 5.50% for an eighth straight time when its meets early on Wednesday. The RBNZ has been unwilling to shift away from its ‘higher for longer’ stance, despite the worsening economic downturn. The services and manufacturing sectors are both showing contraction and consumer and business confidence has been weak. The economy posted annual growth of only 0.3% in the first quarter after two quarters of contraction, which is a technical recession.

The weak New Zealand economy badly needs a rate cut to kick-start growth, but the RBNZ’s first priority is to bring inflation back down to the target band of 1% to 3%, preferably around the 2% midpoint. Inflation eased from 4.7% to 4.0% in the first quarter but this is still above the target band.

What can we expect from the central bank? With a rate hold widely expected at Wednesday’s meeting, the focus will be on the tone of the rate statement. At the previous meeting in May, the RBNZ projected that it wouldn’t lower rates until the third quarter of 2025 and the economy may have worsened since then, which could delay a rate cut even further. I expect that the message from Wednesday’s meeting is that rates will not drop before the inflation picture improves and the RBNZ could warn that rate hikes remain on the table.
NZD/USD Technical

  • NZD/USD is testing support at 0.6114. Below, there is support at 0.6079
  • 0.6180 and 0.6215 are the next lines of resistance

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.