ING warns that RBNZ pricing is too hawkish, NZD faces downside risks

1. Analysts at ING have warned that the New Zealand dollar remains vulnerable, reiterating that "we believe the New Zealand dollar faces some downside risks." The current market pricing is inconsistent with the guidance from the Reserve Bank of New Zealand, putting the New Zealand dollar under potential pressure.2. The market is currently pricing in "a 95 basis point interest rate hike by June 2027," which ING considers "appears overly hawkish." The analysts point out that to validate this path, "the Reserve Bank of New Zealand would need to significantly raise its rate forecasts," while existing projections "currently indicate only a further 25 basis point rate hike over the next three quarters."