• NZD/USD trades around 0.5970 as markets digest the RBNZ’s steady rate decision and shifting US trade dynamics.
• The Reserve Bank of New Zealand pushes back the timing of any potential rate hike to late 2026 or early 2027.
• Fresh uncertainty over US tariffs and Federal Reserve policy expectations keeps currency markets cautious.

NZD/USD trades around 0.5970 on Friday at the time of writing, virtually unchanged on the day, after briefly fluctuating in the wake of the monetary policy decision in New Zealand. The pair struggles to find a clear direction as investors digest a steady policy stance from the New Zealand central bank combined with more cautious rate guidance.

The Reserve Bank of New Zealand (RBNZ) decided to keep its Official Cash Rate (OCR) unchanged at its February meeting, marking the first decision under new Governor Anna Breman. While the market widely expected the hold, the accompanying communication is perceived as dovish. Anna Breman stated that the path toward a sustainable return to the 2% inflation target has been uneven, while noting that inflation is expected to return to the target range in the first quarter of this year.

More importantly, the central bank pushed expectations for the next potential rate hike to late 2026 or early 2027. This shift reinforces the view that the RBNZ is prioritizing stability and aims to avoid premature tightening that could further weigh on economic activity. For the New Zealand Dollar (NZD), this outlook reduces relative yield appeal, particularly against currencies supported by central banks that remain cautious about the timing of easing.

In the short term, however, the impact on NZD/USD remains contained. The US Dollar (USD) is itself trading in an uncertain environment, shaped by shifting expectations regarding the rate path of the Federal Reserve (Fed) and a gradual slowdown in certain economic indicators.

In addition, renewed uncertainty surrounding US trade policy is adding another layer of volatility to currency markets. The recent ruling by the US Supreme Court striking down former US President Donald Trump’s broad “national security” tariff framework has introduced fresh questions about the future direction of US tariffs.

While the decision removes a key structural inflationary pressure in the near term, the US administration is expected to seek alternative legal avenues to reimpose tariffs. This evolving trade backdrop contributes to uncertainty around US growth, inflation, and ultimately Federal Reserve policy expectations, indirectly influencing demand for both the US Dollar and risk-sensitive currencies such as the New Zealand Dollar.