The Reserve Bank of New Zealand's (RBNZ) quarterly Survey of Expectations revealed that two-year inflation expectations edged higher to 2.53% in the second quarter of 2026, up from 2.45% in the previous period. The data, collected between mid-April and early May, showed that business leaders and professional forecasters still anticipate sticky price pressures, with the reading remaining within the central bank's 1%–3% target band but drifting away from the 2% midpoint. Other horizons, such as the one-year and five-year expectations, also posted modest increases, reinforcing the view that inflation is not yet fully anchored.
Despite the uptick, the New Zealand Dollar failed to gain traction. The NZD/USD pair hovered near 0.5850, holding onto recent losses as markets focused on signals that the RBNZ may need to maintain a cautious stance, potentially slowing the pace of rate cuts. The official cash rate (OCR) currently sits at 4.75%, and traders now see a higher probability of a hold at the next meeting in July. Broader risk-off sentiment, a strong US Dollar, and concerns over Chinese demand added to the Kiwi's headwinds.
From a technical perspective, NZD/USD remains below its 50-day and 200-day moving averages, a bearish configuration. Key support lies near 0.5800, with resistance at 0.5900. The mixed survey data—rising two-year expectations alongside easing one-year forecasts—left the overall monetary policy outlook largely unchanged, keeping the NZD under pressure as the market anticipates eventual further easing.
