09:27 AM EDT, 07/09/2025 (MT Newswires) -- The New Zealand dollar (NZD) fluctuated after the Reserve Bank of New Zealand held rates early Wednesday, and is now back at Tuesday's 0.600 close, said ING.

Bets on a rate cut were close to zero, and there isn't anything particularly surprising in the RBNZ statement, wrote the bank in a note. Policymakers are still generally minded to cut rates again, but conditionality is now much higher given inflation concerns and swings in global trade news.

Short-term NZD swap rates initially jumped some 5bps on the announcement but then retreated as markets continued to see a strong case for another rate cut by the end of the year, stated ING.

The bank agrees, but admits that pricing can shift quite abruptly as the infrequently released inflation on July 20 and jobs on Aug. 5 data for Q2 come due.

Like the Australian dollar (AUD) -- which incidentally got a lift from an Reserve Bank of Australia surprise hold this week -- the NZD is less exposed than most other G10 currencies to United Sttaes tariffs, both directly -- only 10% 'Liberation Day' tariff rate -- and thanks to China having secured a deal that shields it from this round of protectionism threats.

ING sees some downside risks for NZD/USD and target levels close to 0.590 later in the summer, mostly due to expectations of higher inflation in the U.S. and a hawkish Federal Reserve repricing.