RBNZ may up the pace of rate cuts – OCBC

“RBNZ policy decision is due tomorrow at 9am (SGT). New Zealand Dollar (NZD) was last at 0.6118 levels, OCBC’s FX strategist Christopher Wong notes.

RBNZ to quicken the pace of rate cuts to 50bp

“Markets are largely expecting the RBNZ to quicken the pace of rate cut to 50bp each at the remaining 2 MPCs for the year and another 100bp cut cumulatively for 1H 2025. NZIER’s quarterly survey of business opinions says that only a net 3 percent of firms were able to raise prices to pass on costs, down from 23% in previous quarter.”

“The same report also indicated that significant proportions of firms are now reporting it easy to find skilled and unskilled labour. With dovish expectations already in the price and Kiwi having corrected >2% in the last week, the NZD risks being a “sell on rumor, buy on fact” into the policy decision unless RBNZ doubles down on dovish rhetoric.”

Bearish momentum on daily chart intact while decline in RSI shows signs of turning from near oversold conditions. Support comes in at 0.61 (200 DMA), 0.6070 levels. Resistance at 0.6160 (50 DMA), 0.6620 (21 DMA).