New Zealand Dollar: Growth risks temper RBNZ pricing – ING
ING notes that New Zealand’s Q2 GDP slowdown could magnify market impact given infrequent data, but the Reserve Bank of New Zealand remains focused on inflation and jobs.
ING observes that New Zealand’s Q2 GDP slowdown may intensify market effects due to the infrequent data releases, but the Reserve Bank of New Zealand (RBNZ) remains focused on inflation and employment figures. The bank anticipates one final rate hike in December, with the probability of an October move increasing. NZD/USD is primarily influenced by global risk sentiment and US events, with a projected range between 0.570 and 0.590 by year-end.
New Zealand's Q2 GDP data, expected overnight, may have a secondary role compared to inflation and employment data, but the infrequent nature of key releases can amplify market impact. The RBNZ delivered a dovish surprise in September, signaling only room for another 25 basis points, bringing the policy rate to 3.0%. However, as energy prices remain elevated, upward revisions in policy projections are more likely by year-end.
The current forecast is for a single hike in December, with odds of an October move rising to around 65%.
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