ANZ Research discusses NZD/USD and RBNZ rates outlook into year-end. ANZ targets NZD/USD at 0.58 by end of Q3 and at 0.60 by year-end.

"We expect the NZD/USD to finish the year at 0.60 and see the RBNZ lifting the official cash rate a further 50bp before the end of the year, before holding at 3.00%. In contrast, our forecast calls for key policy rates in both the US and Australia to hold at current levels, before which the RBA is expected to ease 50bp across 2027. The US likely won’t begin easing until 2028," ANZ notes.

"The NZD should therefore find support from a narrowing interest rate differential. Outsized net short positions are also weighing down the NZD. We see scope for positions to walk back, lifting constraints for the NZD. Geopolitical tensions and energy prices do remain potential headwinds to NZD performance against the USD and AUD given New Zealand’s energy importer status," ANZ adds.