NZD Steadies After Dovish RBNZ Survey Signals Rate Cut Bets

The New Zealand Dollar (NZD) has steadied off two-week lows after a Reserve Bank of New Zealand (RBNZ) survey indicated a more dovish policy outlook.

The survey showed a notable decline in short-term inflation expectations, with two-year-ahead inflation expectations falling to 2.03% from 2.33%. This drop reinforces market bets that the central bank could begin cutting the Official Cash Rate (OCR) as early as August, with a quarter-point cut now seen as more likely than not.

The modest rebound in the NZD suggests some investors view the sell-off as overdone, given that the survey aligns with the RBNZ's own projections from its May Monetary Policy Statement.