Kiwi outlook: key zone for Kiwi bears

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This week’s Reserve Bank of New Zealand (RBNZ) policy decision will help shape trading ranges for the next quarter.

Kiwibank’s economists expect the RBNZ to deliver a 25-basis point cut, lowering the Official Cash Rate (OCR) to 3.0%. According to Kiwibank, another reduction is on the cards, though the pace of easing may not be aggressive enough to provide the stimulus the economy needs.

They argue that a more supportive stance is required to stimulate the lagging economy, suggesting 2.5% would be closer to the right level. A dovish tone from RBNZ Assistant Governor Christian Hawkesby could reinforce this view, and the Kiwi currency could fall towards 58c, giving a bit of relief to exporters.

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