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Feb 26 - 09:55 AM

Goldman Sachs: RBNZ on Hold this Week, NZD Vulnerable to S-Term Weakness

By eFXdata  —  Feb 26 - 08:19 AM


Goldman Sachs anticipates the Reserve Bank of New Zealand (RBNZ) to maintain its current policy stance in the upcoming meeting, with no changes expected until a projected rate cut in August. Despite market speculation, currently over 30% for a rate hike next week, Goldman's analysis aligns with the notion of a hold based on recent unanimous decisions and economic indicators suggesting a rebalancing economy. Given the global shift towards disinflationary trends, the RBNZ may opt for a cautious approach. This scenario, coupled with market expectations of a 'higher for longer' rates environment and the potential for a dovish surprise from the RBNZ, positions the New Zealand Dollar (NZD) for potential near-term weakness, particularly against high beta currencies less sensitive to rate adjustments.

Key Insights:

  • RBNZ's Next Moves: Goldman Sachs forecasts the RBNZ will keep rates unchanged in the upcoming meeting, with a first rate cut anticipated in August.

  • Market Expectations vs. Reality: Despite market bets on a rate hike, consistent economic data and global disinflationary pressures suggest a hold strategy from the RBNZ.

  • NZD's Position: Given the divergence between market expectations and potential RBNZ dovishness, the NZD faces near-term vulnerability, especially against currencies less affected by rate changes.


Goldman Sachs' analysis underscores a cautious stance by the RBNZ amid evolving economic conditions, suggesting a potential mismatch with market expectations that could influence NZD performance in the short term. The focus remains on global economic trends and their impact on local policy decisions, highlighting the intricate balance central banks navigate in adjusting monetary policy.

Goldman Sachs Research/Market Commentary


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