FX Insights: Foreign Exchange - Global

Research evidence excerpt

FX Insights: Foreign Exchange - Global

Global Markets Research

8 July 2026FX Insights

Foreign Exchange - Global

Research Analysts

RBNZ delivers a first 25bp rate hike by consensus Global FX Strategy

Andrew Ticehurst - NAL

“Some” further hiking remains likely, while we see no implications for RBA andrew.ticehurst@nomura.com

and remain short GBP/NZD. +61 2 8062 8611

• The RBNZ commenced its rate hike cycle today, raising the cash rate by 25bp to

2.50%, in line with consensus and our expectations.

• It indicated that “some” further rate hiking is likely, and our base case remains for

25bp hikes in September and December, returning the cash rate to near its long-term

neutral level of 3.00%.

• We see no implications for the RBA from today’s news and remain shortGBP/NZD.

The bottom line

The RBNZ today commenced its rate hike cycle, as we and consensus expected. It

indicated that “some” further reduction in monetary stimulus was likely. This is also

consistent with our (unchanged) base case, for two further 25bp hikes, in September and

December (Figure 1), which would return the cash rate to 3.0%, the middle of its longer-

term 2.5-3.5% nominal neutral rate estimate. It is also fairly consistent with prior market

pricing. As such, the market reaction has been relatively muted (to date), with NZD and

NZ rates only modestly higher, perhaps on confirmation that the RBNZ has indeed

decided to hike today.

Pricing behaviour and future inflation clues will likely be key to future meeting decisions,

with the RBNZ flagging uncertainty over whether firms would absorb or pass on cost

pressures. It noted that an economic recovery was expected from Q3, but with material

spare capacity, inflation data may be more important than growth data from here,