The Reserve Bank of New Zealand (RBNZ) cut the OCR by 25bps to 3.25%, aligning with market expectations. However, the tone of the meeting suggests a shift away from a dovish stance. Key highlights from the MPC include a 5-1 vote split in favour of the cut, which contrasts with the prevailing market expectation for a unanimous decision. Pair was last at 0.5968 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Daily momentum is flat

"RBNZ's updated projections indicate an average OCR of 2.9% by year-end. Chief Economist Conway emphasised that rates are nearing a neutral level, while Governor Hawkesby expressed caution about future rate adjustments, remarking 'we have done a lot of work'. "

"This suggests the RBNZ is no longer committed to a predetermined easing trajectory, with future moves likely to depend on incoming economic data. We anticipate the possibility of another 25bp cut to 3.0% in the third quarter, potentially in August. Importantly, RBNZ's departure from its dovish stance since July 2024 may potentially be a positive for NZD. "

"Daily momentum is flat while RSI fell. Golden cross formed with 50 DMA cutting 200 DMA to the upside. Interim, we see 2-way risks but more broadly, bias to buy dips. Support at 0.5930 (21 DMA), 0.5860 levels (50, 200 DMAs). Resistance at 0.6020, 0.6060 levels."