The Reserve Bank of New Zealand (RBNZ) could hike rates less than expected but the NZD/USD pair is still seen higher over the coming months, economists at ING report. 

RBNZ pivot may not come in April

“The RBNZ continued to delay their dovish pivot. There is a good probability that April won’t see a pivot either. What will tilt the balance on the dovish side for the RBNZ, in our view, will be the disinflation process (which may well start earlier than they are projecting) and/or property market weakness rather than well-telegraphed evidence of a recessionary environment.”

“We expect the RBNZ to end up short of their projected 5.50% peak rate, but that should not prevent NZD to touch 0.66 in 2H23.”

“NZD/USD – 1M 0.62 3M 0.64 6M 0.66 12M 0.67”