New Zealand Dollar: Best risk-reward long into RBNZ – Societe Generale

Societe Generale's Kit Juckes has identified the New Zealand Dollar as the most attractive G10 currency heading into this week's central bank meetings, citing a high likelihood of Reserve Bank of New Zealand (RBNZ) rate hikes and their potential for up to two more in mid-2026. Juckes believes the NZD offers the best risk-reward ratio in the long term, despite recent gains, due to improving growth prospects and the currency's underperformance against the Australian Dollar (AUD) this year.

Market expectations include a near-certain RBNZ rate hike, a small chance of a Federal Reserve hike, a strong probability of a Bank of Canada rate hike, and an almost certain RBNZ hike. The only central banks not expected to raise rates in the near future are the ECB and the BoC, which both have minor rate hikes planned for December.

Juckes emphasizes the need for strong messaging from both the RBNZ and the BoC ahead of their respective meetings. NZD's growth expectations are also improving, and it has significantly fallen against the AUD this year, giving it an edge as the best risk-reward long position going into the upcoming RBNZ meeting.