While economists at HSBC expect NZD/USD to rise later in the year, the near-term upside is likely to be limited.

Excessive debt issuance in NZ could weigh on the NZD over the near term

“We think the RBNZ meeting was slightly more hawkish than markets expected. However, the near-term upside for NZD/USD is likely to be limited, as risk appetite, which remains the dominant driver for the currency pair, may not improve until renewed signs of disinflation emerge domestically and internationally.”

“Any sign of excessive debt issuance in New Zealand could also weigh on the NZD over the near term. However, we expect NZD/USD to rise over the longer term when some of the uncertainties about the Federal Reserve, the US economy’s landing, and China’s recovery subside.”