NZD Outlook: Rising Rate Pressure Keeps Kiwi Supported

The New Zealand dollar remains supported by strong risk appetite and improving domestic data. Inflation expectations have risen to 2.93%, cost pressures are strong, and wage expectations are at their highest level since 2024. This raises doubts about whether the RBNZ can really wait until late in the year to lift rates.

Markets are still pricing only a small chance of a July hike and around a 40% chance in September, with a December move not fully priced in. After 325 basis points of easing, policy remains stimulatory, and there is growing risk that rate hikes could come earlier than markets expect.

NZD/USD is consolidating after its January breakout, holding a broader upside bias while trading around the 0.6000 area. A break above 0.6050 would open the door to a retest of recent highs, while a move below 0.5950 would weaken the outlook.

NZD/USD Daily Chart

NZD/JPY has broken above 92.86, increasing the chance of a move toward the February highs near 94.98. However, if price falls back below 92.86, focus shifts to 92.00, and a break there would turn the short term bias lower.

NZD/JPY Daily Chart