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Analysts at Morgan Stanley offer their expectations of the Reserve Bank of New Zealand’s (RBNZ) monetary policy decision and its impact on the kiwi dollar.

Key quotes

“We expect the RBNZ’s May MPS to have a similar outcome to that seen in February: that the RBNZ will sound dovish, but continued tapering and an upward revision to the unconstrained OCR is likely to signal to the market that normalization is to continue.”

“We continue to see NZD strength on crosses, such as versus AUD and JPY, but we are neutral on NZD/USD overall…NZD/JPY looks attractive to us amid policy divergence and robust liquidity conditions.”