The New Zealand dollar edged higher to around $0.593 on Tuesday but remained confined to a narrow range as traders braced ahead of the RBNZ’s rate decision. Markets have already priced in a 25bps cut to 3%, extending the current loosening cycle to a total of 250bps. Supporting the case for further easing, producer output prices rose 0.6% qoq in Q2, slowing from a 2.1% increase in Q1 and below expectations for a 1% gain. Analysts note, however, that policy settings are near neutral and the effects of previous cuts are still filtering through the economy. Even so, sluggish growth and excess capacity could justify additional easing. Meanwhile, two-year swap rates remain near its lowest levels since early 2022, leaving them exposed to any hawkish surprise. Elsewhere, attention is shifting to global events, including key trade partner China’s policy rate decision, Fed Chair Powell’s speech for clues on US monetary policy, and crucial US–Russia talks that could influence risk sentiment.