ING Sees New Zealand's Central Bank Cutting Rates Twice This Year; Comments on The New Zealand Dollar

09:05 AM EDT, 08/06/2025 (MT Newswires) -- New Zealand's Q2 jobs data released overnight Tuesday showed some slack is building, although not at an alarming pace, said ING.

Unemployment rose from 5.1% to 5.2%, less than the consensus 5.3%, with employment declining 0.1% quarter-on-quarter, in line with expectations, wrote the bank in a note. Wages accelerated slightly more than expected, though.

For now, "benign" consumer price index figures for Q2 justify a cut on Aug. 20 and ING remains of the view that further inflation moderation and growth uncertainty could lead to another 25bps reduction in November. Markets are fully pricing in an August move and 42bps in total by year-end.

In line with ING's call that the Reserve Bank of New Zealand (RBNZ) won't materially outpace the rate-cutting trajectory embedded into swaps, ING continues to see upside room for NZD/USD into year-end on the back of its bearish US dollar (USD) call, with a return above 0.60 being the bank's base case.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.