New Zealand Dollar Offers Best Risk-Reward for Long Positions Ahead of RBNZ – Societe Generale

The New Zealand Dollar offers the most attractive risk-reward proposition for a long position among G10 currencies ahead of this week’s central bank meetings, according to Societe Generale’s Kit Juckes, even after its recent gains. Markets regard an RBNZ rate hike as almost certain and anticipate two further moves by mid-2026. Juckes favours NZD as the growth outlook improves and the currency has lagged AUD this year.

Does NZD Offer the Best G10 Opportunity?

"The markets are priced for a very remote chance of an ECB rate hike, a small chance of a hike by the Fed, a strong chance of a Bank of Canada hike, and almost certainly an RBNZ hike."

"The two non-hikers are expected to raise rates in December, and this week’s expected hikers are likely to act two more times by mid-2027, so the messaging needs to be strong in both cases."

"As for NZD, it does have the advantage that growth expectations are picking up, and the currency has lost a lot of ground to the AUD this year."

"It looks like the best risk-reward long going into tomorrow’s meeting, despite recent gains."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)