Credit Suisse maintains a neutral bias on NZD in Q2.

"NZD was directionless in Q1. Our view that the RBNZ would not live up to the aggressive pace of rate hikes that markets were pricing in was correct, but was overwhelmed by the much more volatile outlook for RBA monetary policy. We do not see high odds of this changing in Q2. The data are showing signs of weakness (e.g. Q4 GDP), but other demand indicators are still holding up, as per the ongoing resilience in imports," CS notes.

"The large deterioration in the trade balance has attracted the attention of rating agencies, but so far not of markets. A rating downgrade around the budget (in May) might make markets more alert to it," CS adds.