The RBNZ stored rates of interest on maintain at 2.25% as anticipated of their February coverage assertion whereas updating financial forecasts to sign that they’re in no rush to tighten.
Which NZD methods moved past the watchlist stage, and the way did the “dovish maintain” announcement translate to worth motion amid some risk-off flows spurred by geopolitical tensions and U.S. information?
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We’re breaking down our Kiwi setups this week and analyzing how every pair carried out after the RBNZ resolution whereas markets digested US-Iran geopolitical developments and a strengthening hawkish Fed theme?
The Setup
What We Have been Watching: RBNZ Financial Coverage Assertion (February 2026)
- Expectation: RBNZ to maintain rates of interest unchanged at 2.25% and difficulty ahead steering on tightening
- Information consequence: The central financial institution stored coverage on maintain as anticipated however downplayed above-target inflation, suggesting a much less aggressive tempo of price hikes for the yr
- Market atmosphere surrounding the occasion: Markets appeared anxious forward of one other spherical of talks between the U.S. and Iran, with information retailers reporting that Trump could possibly be prepping to strike by the weekend. Upbeat mid-tier U.S. information additionally fueled hawkish Fed expectations, adopted by the FOMC minutes acknowledging that tightening is feasible if inflation stays elevated.
Occasion Final result
The February RBNZ assertion delivered the anticipated resolution to pause from their earlier easing cycle, sustaining the OCR at 2.25%, however the tone of latest Governor Anna Breman’s press convention and up to date inflation forecasts pointed to a extra cautious method to tightening.
As well as, the RBNZ’s up to date “price monitor” or projection the place the OCR is headed signaled that the primary rate of interest hike wouldn’t occur till a lot later within the yr, throwing chilly water on expectations for tightening as early as September.
Key Takeaways:
- OCR held at 2.25%. The Committee reached consensus to maintain charges unchanged, with the ahead OCR path reflecting a considerably stronger financial outlook and balanced dangers to inflation.
- Inflation barely above goal however anticipated to fall. Annual CPI rose to to three.1% within the December 2025 quarter, barely above the 1–3% goal vary, however the Committee is assured that it’s going to fall to across the mid-point over the following 12 months.
- Above-target inflation pushed by momentary components. Latest will increase in inflation have been pushed by larger tradables inflation, and are anticipated to ease over the approaching yr.
- Financial restoration broadening. In response to earlier OCR cuts, financial development is broadening throughout sectors comparable to manufacturing, development, and a few retail. GDP elevated 1.1% within the September quarter, and financial development is predicted to extend over 2026.
- Labor market stabilizing however unemployment elevated. The unemployment price elevated to five.4% however the jobs market is predicted to proceed to strengthen because the financial restoration broadens via 2026.
- Accommodative coverage to stay for a while. If the economic system evolves as anticipated, financial coverage is prone to stay accommodative for a while. Because the restoration strengthens and inflation falls sustainably in the direction of the goal midpoint, financial coverage settings will step by step normalize.
The Kiwi, which had been consolidating main as much as the RBNZ resolution, dropped sharply upon seeing the not-so-hawkish commentary within the official assertion and fewer upbeat quarterly financial estimates.
NZD/USD dropped roughly 1.35% on the day, falling from close to 0.6050 earlier than the announcement to under the important thing 0.6000 stage whereas GBP/NZD recovered +0.64%, as Sterling recouped earlier losses in opposition to a weakening Kiwi regardless of dovish BOE expectations.
Market pricing for RBNZ price hikes was rapidly scaled again from roughly 90% likelihood of an October hike earlier than the assembly right down to about 75% afterward.
Basic Bias Triggered: Bearish NZD Setups
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Broad Market and Exogenous Drivers:
Vacation Warning (Monday-Tuesday): Liquidity was thinner at first of the week, as most merchants within the U.S. and Asia had been out having fun with the Presidents’ Day and Chinese language Lunar New Yr holidays. Nonetheless, a point of market anxiousness was noticed as merchants braced for developments in US-Iran negotiations, the FOMC assembly minutes, key U.S. financial information, and central financial institution choices in a while.
Protected-Haven Spike (Wednesday-Thursday): Rumors {that a} US-Iran warfare could possibly be imminent, adopted by upbeat mid-tier U.S. information and comparatively hawkish FOMC minutes, mixed forces to spur risk-off flows midweek. Main currencies appeared principally targeted on financial coverage divergences, although, because the RBNZ introduced a “dovish maintain” whereas ECB head Lagarde’s potential early exit additionally contributed to uncertainty. Crude oil additionally bucked the development, as considerations about Center East manufacturing and shipments spurred a gentle climb.
Supreme Courtroom Shock (Friday): Tariffs developments stole the highlight on Friday, because the U.S. Supreme Courtroom declared in a 6-3 resolution that Trump’s tariffs had been unlawful, which then prompted a swift response from the White Home imposing 10% substitute tariffs underneath totally different authorized authority. Fiscal considerations amid a U.S. partial authorities shutdown weighed closely on the greenback, together with weaker than anticipated This autumn 2025 superior GDP information.
AUD/NZD: Bearish NZD Occasion Final result + Danger-On Situation = Arguably good odds of a internet optimistic consequence
AUD/NZD 1-hour Foreign exchange Chart Sooner with TradingView
Our AUD/NZD watchlist concept targeted on a doable bounce off an space of curiosity across the 1.1700 main psychological help within the occasion that the RBNZ resolution seems much less hawkish than anticipated.
The pair had already been edging near the resistance-turned-support across the authentic 50% Fibonacci retracement stage main as much as the goal occasion, as market anxiousness was evident early the week previous to top-tier stories and geopolitical updates. Patrons began to defend the ground whereas Kiwi merchants began positioning forward of the RBNZ announcement, which then sparked a pointy selloff when the central financial institution’s ahead steering revealed they had been in no rush to hike.
The RBNZ “dovish maintain” contrasted sharply with the anticipated begin of the RBA’s tightening cycle and openness to further price hikes, which had been in a while supported by upbeat Australian jobs information. Mixed with anti-USD sentiment (Supreme Courtroom tariffs resolution, weak U.S. superior GDP, partial authorities shutdown and US-Iran tensions) that not directly supported danger property later within the week, this rendered the AUD/NZD setup eligible to maneuver past the watchlist stage.
Whereas some safe-haven flows on US-Iran geopolitical tensions weighed on risk-taking across the goal occasion, foreign exchange market actions appeared primarily targeted on rate of interest differentials then. Together with the rebound in gold costs, sturdy Australian employment information bolstered hawkish RBA bets and allowed the Aussie to benefit from stabilizing danger urge for food after the goal occasion.
AUD/NZD spent the rest of the week buying and selling above post-RBNZ ranges because it busted via the swing excessive close to R1 (1.1788) then carried on with its climb to the 1.1850 minor psychological resistance by Friday’s shut.
Merchants who jumped in a protracted place on the space of curiosity or on a break above the pivot level (1.1719) throughout the RBNZ announcement might have caught majority of the rally.
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Not Eligible to Transfer Past Watchlist – NZD/JPY & Bullish NZD Setups
NZD/JPY: Bearish NZD Occasion Final result + Danger-Off Situation
NZD/JPY 1-hour Foreign exchange Chart Sooner with TradingView
This bearish NZD/JPY setup eyed a doable shallow pullback or a breakdown within the occasion the RBNZ resolution seems extra dovish than anticipated in a risk-off setting. The pair had beforehand damaged under a longer-term ascending development line to counsel {that a} downtrend could also be within the playing cards.
Though some safe-haven flows had been in play throughout the first half of the week, the pair hesitated to increase its droop under the 92.00 main psychological help, which held as a strong flooring all through. Because it turned out, weaker than anticipated Japanese GDP launched on Monday dampened BOJ tightening expectations whereas the shortage of verbal and precise yen-tervention midweek stored the forex’s features in examine, adopted by downbeat CPI on Friday.
Because of this, NZD/JPY merely moved sideways between the 92.00 to 92.50 ranges for the rest of the week whereas yen-specific worth dynamics appeared to outweigh broader market sentiment shifts.
GBP/NZD: Bullish NZD Occasion Final result + Danger-On Situation
GBP/NZD 1-hour Foreign exchange Chart Sooner with TradingView
Our GBP/NZD watchlist mentioned a possible quick if the RBNZ occasion proved NZD-bullish in a risk-off setting, with 2.2600 as the important thing space of curiosity — aligning with the 200 SMA, the 50% Fibonacci retracement of February’s downswing, and the two.2572 Pivot Level. Sustained buying and selling under that stage was anticipated to ask contemporary promoting strain towards prior lows close to 2.2470.
The RBNZ consequence was NZD-bearish, not NZD-bullish — the precise reverse of what this setup required. Quite than GBP/NZD dealing with draw back strain from a hawkish Kiwi, the pair surged sharply on the dovish RBNZ shock. The pair prolonged features in subsequent classes, transferring effectively above the two.2600 resistance space that the setup anticipated as a ceiling.
The elemental premise, that the RBNZ would shock to the hawkish aspect, and the technical premise, that the two.2600 stage would maintain as resistance, had been clearly not met. With each situations failing to materialize, this setup was not eligible to maneuver past the watchlist stage.
NZD/CHF: Bullish NZD Occasion Final result + Danger-Off Situation
NZD/CHF 1-hour Foreign exchange Chart Sooner with TradingView
Our watchlist for NZD/CHF bullish mentioned a possible push towards the R1 Pivot Level (0.4670) and the 0.4680 vary resistance in a risk-friendly atmosphere if the RBNZ’s up to date inflation forecasts pointed to near-term price hike energy. NZD/CHF had been holding technical help on the 0.4620 space going into the occasion.
As a substitute, the RBNZ delivered a dovish shock that was NZD-negative moderately than NZD-positive. The elemental premise — an RBNZ signaling earlier or extra aggressive tightening — was not met. Governor Breman’s cautious commentary and a price forecast monitor that pushed the primary potential hike effectively into late 2026 or early 2027 invalidated the bullish NZD bias required for this setup. The concurrent risk-off atmosphere from U.S.-Iran tensions offered no offsetting tailwind for a risk-sensitive NZD.
NZD/CHF broke under the 0.4620 help that had been holding and prolonged decrease, confirming this situation was not eligible to maneuver past the watchlist stage.
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The Verdict
The RBNZ resolution got here in step with expectations on the floor, as policymakers agreed to maintain charges unchanged and pause from their easing cycle. Nevertheless, their up to date financial forecasts and press convention informed the true story since officers appeared satisfied that worth pressures might decelerate once more and clarified that they aren’t seeking to tightening coverage anytime quickly.
Specifically, their up to date OCR monitor pushed the primary potential hike to late 2026 or early 2027, effectively wanting the near-two-hikes-by-year-end that markets had priced in, main Kiwi merchants to unwind bullish positions.
On the similar time, foreign exchange markets appeared to zone in on financial coverage divergences amid broader market uncertainty on geopolitical headlines and warning forward of key U.S. developments. The beginning of the RBA’s tightening period allowed the Aussie to say its dominance over different main currencies whose coverage path remained unclear. Afterward, resurfacing “Promote America” vibes stemming from tariffs drama and U.S. information misses undermined the hawkish Fed narrative, resulting in a rebound in risk-taking.
General, we’d price this week’s AUD/NZD watchlist setup as “extremely possible” supportive of a internet optimistic consequence. Not solely did the pair reply as anticipated to widening central financial institution coverage divergences, nevertheless it additionally reacted effectively to technical ranges talked about within the dialogue and sustained its post-event response all through the week.
Its worth motion throughout and after the RBNZ assertion gave a number of alternatives to capitalize on the transfer on short-term pullbacks (1.1680 pre-event or 1.1780 post-event) and resistance breaks (pivot level, 1.1800 main psychological stage, R1 and swing excessive).
Key Takeaways:
Coverage Divergence Creates Sturdy, Multi-Session Themes
The RBA/RBNZ divergence — one mountain climbing, one holding with warning — wasn’t a one-session story. AUD/NZD upside continued throughout a number of days, supported by each the preliminary RBNZ shock and follow-up Australian labor market energy. When elementary divergence is confirmed and widening, retracements usually change into higher entry factors moderately than causes to exit.
Pre-Occasion Positioning Amplifies Put up-Occasion Strikes
NZD’s Tuesday rally into the RBNZ resolution, constructed on hawkish hypothesis and powerful meals worth information, created the situations for a extra violent correction when the dovish shock arrived. The better the pre-event positioning divergence from the eventual consequence, the sharper the reversal. Monitoring positioning and pre-event worth motion might help calibrate anticipated transfer measurement.
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