ING expects the Reserve Bank of New Zealand to lower interest rates by 25 basis points to 2.25% in its policy announcement tonight, a move that could mark the end of the current easing cycle and lend support to NZD/USD, potentially pushing the pair back above 0.570 by year-end.
Rate Cut Likely Marks Terminal Level, Supporting NZD
ING’s FX strategist Francesco Pesole says the central bank is likely to deliver the cut at 03:00 AM CET, bringing rates to what ING views as the terminal level. Slower-than-expected disinflation and more resilient economic growth suggest further easing may not be necessary.
While the RBNZ may avoid fully ruling out additional cuts, updated projections are expected to imply no further reductions, sending a mildly hawkish signal. Pesole notes this should reduce expectations for more easing in 2026—currently 42bps priced in by May—and offer a boost to the New Zealand dollar.
ING maintains a bullish outlook on NZD/USD, anticipating a move back above 0.570 by the end of the year.
