Key Moments
- HSBC Global Research anticipates continued NZD weakness versus USD in the coming weeks, even as markets factor in additional RBNZ tightening over 12 months.
- The Reserve Bank of New Zealand is expected to keep its policy rate unchanged at 2.25% at the 8 April meeting, according to market expectations dated 25 March 2026.
- Higher oil and gas prices tied to the Middle East conflict have pushed local yields higher and led markets to price more RBNZ hikes, yet NZD/USD is still seen remaining soft without a hawkish surprise.
RBNZ Policy Expectations and NZD/USD Outlook
HSBC Global Research expects the New Zealand Dollar (NZD) to stay under pressure against the U.S. Dollar (USD) in the coming weeks, even though markets are pricing in additional policy tightening by the Reserve Bank of New Zealand (RBNZ) over the next 12 months.
The upcoming RBNZ policy meeting on 8 April is anticipated to result in no change to the official cash rate, which is expected to remain at 2.25%. This expectation is based on market pricing as of 25 March 2026.
Despite the prospect of further tightening ahead, HSBC Global Research views NZD/USD as likely to remain weak unless the central bank delivers a notably more hawkish stance than markets currently expect.
Impact of Oil and Gas Prices on Local Yields
Rising oil and gas prices, linked to the conflict in the Middle East, have been a key factor in pushing New Zealand yields higher. These moves along the yield curve indicate that investors are now factoring in additional rate hikes by the RBNZ over the coming year.
Higher local yields have altered interest rate differentials, with New Zealand rates rising relative to Australian rates. This has, in turn, provided some support for NZD performance against the Australian Dollar (AUD), even as the NZD remains under downward pressure versus the USD.
Market Positioning and Relative Rate Moves
New Zealand interest rates have increased compared to Australian rates, which has lent strength to NZD against AUD. However, this relative support has not translated into a constructive view on NZD/USD in the near term.
According to HSBC Global Research, the NZD is likely to continue facing headwinds against the USD over the coming weeks, barring an unexpectedly hawkish outcome from the RBNZ at its 8 April meeting.
Policy Meeting Snapshot
| Event | Details |
|---|---|
| Central bank | Reserve Bank of New Zealand (RBNZ) |
| Meeting date | 8 April |
| Expected policy rate | 2.25% |
| Market expectations reference date | 25 March 2026 (Bloomberg) |
Direct Commentary from the Research Note
“The Reserve Bank of New Zealand (RBNZ) will meet on 8 April, and markets expect the policy rate to hold at 2.25% (Bloomberg, 25 March 2026).”
“However, the yield curve now reflects additional expected RBNZ hikes over the next 12 months, driven by higher oil and gas prices linked to the Middle East conflict.”
“New Zealand rates have risen relative to Australian rates, supporting NZD strength vs AUD.”
“Unless the RBNZ delivers an unexpectedly hawkish outcome, the NZD is likely to remain under pressure in the coming weeks.”
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