RBNZ Rate Decision

NZDUSD is in a downtrend, fell from 0.5840 to 0.56476 and as of today is trading around 0.564, its lowest level since November 2025. Driving force is US dollar strengthening, which is tied to the Fed's hawkish approach (even though rates were kept unchanged).

• A July hike is now priced at 66%, down from over 80% the previous week, so markets are now anticipating just two hikes this year instead of three
• Despite RBNZ hawkish guidance, falling oil prices amid US-Iran progress have reduced inflation concerns, hence RBNZ less urgency to hike rates.
• The last decision was itself split: three internal MPC members voted to hold, while three external members voted for a 25bp hike.

What This Means

• A hold is now the closer to consensus outcome but isn't fully priced, since 66% still leans hike, so a hold would likely trigger NZD selloff, extending the existing downtrend toward new 2026 lows.
• A hike is a smaller surprise relative to current pricing and could trigger a short bounce given how stretched the downtrend already is.

The dollar has been strong, and the odds of a rate hike have been slipping. Because of that, selling into any bounce in NZDUSD still looks like the safer bet than buying it. If you're tempted to go long on NZD just because RBNZ sounds hawkish, be careful, stronger force right now is the US dollar, not New Zealand's rate talk.

Pay close attention to the press conference, vote was close last time, so the numbers alone won't tell the full story. What matters more is what RBNZ says about the next meeting in September; if they hint at a hike coming then, or stay quiet on it, that's likely to move the market more than today's decision does.