NZD/USD extends pullback ahead of the Reserve Bank of New Zealand (RBNZ) meeting. Economists at ING expect the pair to return to 0.64 by the end of the year.

Watch for a dovish tilt by the RBNZ

“We see some non-negligible risk that the RBNZ will have to revise its rate path projections lower. Even if the RBNZ hikes by 50 bps (as per our base case scenario and market expectations) the downside risks from a dovish repricing are quite material for the New Zealand dollar.” 

“We suspect NZD/USD will struggle to hold onto recent gains over 0.64 over coming weeks.”

“Our base case is a return to 0.64 by year-end in NZD/USD, largely due to some potential USD weakness much later in the year.”