A Reuters poll of 29 economist project no change in policy (rate to remain at 5.50%) when the RBNZ meets on April 10. That would represent the 6th straight month with no change:
- Out of 29 economists surveyed from March 28-April 4, all expect the official cash rate to remain at 5.50% on April 10.
- Of these, 15 anticipate the first rate cut to occur by the end of the third quarter, with one expecting it as early as this quarter, while the remaining 14 predict the rate will stay the same until the fourth quarter or later.
Despite inflation projections showing a return to the target range of 1%-3% next quarter, the exact timing for rate reductions remains uncertain.
The central bank has previously implemented aggressive rate hikes totaling 525 basis points between October 2021 and May 2023, which contributed to a double-dip recession, limiting further rate increase options.
The RBNZ on projections look for a cut but not until next year. The central bank said that they need to keep policy restrictive to ensure that inflation expectations become fully anchored.
The median forecast from the market showed the cash rate down 50 basis point of 5% by the end of this year.
If the RBNZ is perceived to be later than the Federal Reserve it should lead to a higher NZDUSD.
Looking at the 4-hour chart below, the NZDUSD has seen a rebound this week after falling on Monday to the lowest level since November 17, but found dip buyers. The price on Thursday extended above the 100-bar MA on the 4-hour chart at 0.60294. Late day selling pushed the price back below that MA into the close and into the Asian Pacific session.