NZD/USD: RBNZ poses a risk, yet ongoing pressure expected – HSBC

NZD Faces Ongoing Pressure Despite RBNZ Policy Expectations

According to HSBC Global Research, the New Zealand Dollar (NZD) is likely to remain subdued against the US Dollar (USD) in the near term. This outlook persists even as markets anticipate further tightening from the Reserve Bank of New Zealand (RBNZ) over the next year. The upcoming RBNZ meeting on April 8 is widely expected to keep interest rates steady at 2.25%. Meanwhile, elevated oil and gas prices are contributing to higher local bond yields. Unless the RBNZ adopts a more aggressive stance than anticipated, NZD/USD is expected to stay on the back foot.

Key Drivers: RBNZ Policy and Commodity Prices

The Reserve Bank of New Zealand is scheduled to convene on April 8, with consensus forecasts pointing to no change in the policy rate, which should remain at 2.25% (Bloomberg, March 25, 2026).

Nonetheless, the yield curve now signals that markets are factoring in additional RBNZ rate hikes over the coming year. This shift is largely attributed to rising oil and gas prices, a trend linked to ongoing tensions in the Middle East.

Interest rates in New Zealand have climbed relative to those in Australia, lending some support to the NZD against the AUD.

However, barring a surprisingly hawkish move from the RBNZ, the New Zealand Dollar is expected to remain under downward pressure in the weeks ahead.

(This report was produced with assistance from artificial intelligence and subsequently reviewed by an editor.)