RBNZ: Patient hiking path supports New Zealand Dollar – TD Securities

💡 DMK Insight

The RBNZ’s decision to maintain the OCR at 2.25% is a clear signal of their cautious approach to monetary policy, and here’s why that matters now: With the first potential rate hike not expected until late 2026 or early 2027, traders should brace for a prolonged period of low rates, which could keep the NZD under pressure. This dovish stance contrasts sharply with other central banks that are tightening aggressively, creating a divergence that could affect forex pairs like NZD/USD. If you’re trading this pair, keep an eye on the 0.6000 level; a break below could trigger further selling. Additionally, the limited tightening forecast suggests that any bullish sentiment around the NZD might be short-lived, especially if global economic conditions shift. On the flip side, this could present a buying opportunity for those looking to capitalize on potential weakness in the NZD. If inflation pressures mount unexpectedly, the RBNZ might have to pivot sooner than expected, so watch for any economic data releases that could influence their decision-making. Overall, the key takeaway is to monitor the economic indicators closely as we approach 2026, as they could provide early signals of a shift in policy.