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Investing.com - The New Zealand dollar remained stable at 0.600 against the U.S. dollar after the Reserve Bank of New Zealand (RBNZ) kept interest rates unchanged, as widely expected by markets.
The RBNZ decision triggered brief volatility in short-term swap rates, which initially jumped about 5 basis points before retreating as markets continued to price in a rate cut by year-end. The central bank maintained its dovish stance but indicated higher conditionality for future cuts amid inflation concerns and shifting global trade dynamics.
Market attention now turns to upcoming economic data releases, with second-quarter inflation figures due on July 20 and employment data scheduled for August 5, which could significantly influence RBNZ policy expectations.
The New Zealand dollar, like its Australian counterpart, faces relatively lower exposure to U.S. tariffs compared to other G10 currencies, benefiting from both a lower 10% "Liberation Day" tariff rate and China’s exemption from recent protectionist measures.
ING analysts forecast potential downside for NZD/USD, targeting levels near 0.590 later this summer, primarily due to expectations of higher U.S. inflation and a potential hawkish repricing of Federal Reserve policy.
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