Commerzbank forecasts only two RBNZ rate increases, below market expectations, pushing NZD/USD toward 0.55 by late 2027.
The New Zealand Dollar remains under pressure as weak economic growth and persistent inflation limit the Reserve Bank of New Zealand’s ability to tighten policy. Commerzbank expects only two rate hikes, one fewer than markets anticipate, capping the kiwi’s upside potential.
Markets currently price three RBNZ hikes and one Fed increase by year-end, but the bank sees both central banks delivering one less. EUR/NZD is projected to rise to 2.20, while NZD/USD drifts toward 0.55 by late 2027 amid anaemic growth.
Next year, the Fed is likely to cut rates, but strong US growth should support the USD. In New Zealand, sluggish activity and high inflation will prevent the RBNZ from returning rates to neutral, weighing on the kiwi.