The Reserve Bank of New Zealand (RBNZ) is all but guaranteed to cut interest rates by 0.25% for the third meeting in a row, from 3.00% to 2.75%, on Thursday 10th September. We wouldn’t completely rule out a 0.50% reduction. Either way, we suspect that rates will eventually fall all the way to 2.0%. Since that would be a much more aggressive loosening in policy than the markets expect, the New Zealand dollar could yet weaken from US$0.64 now to around US$0.55.
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