RBNZ unlikely to restrict itself to a rate cut tonight

Since the beginning of year, NZD has declined by more than 10% on a trade weighted basis, and the Reserve Bank of New Zealand's inflation outlook is based on its notably weaker exchange rate. 
There are a few participants who doubt that the New Zealand central bank (RBNZ) will cut its key rate by a further 25bp to then 2.50% tonight. 

Not only the RBNZ forecasts for year-end, but the coming quarters are also more than 5% below current exchange rate levels. Therefore the central bank cannot rely on Fed's rate hike unlike many of its colleagues.

In order to ensure the strongest effect on the exchange rate, RBNZ has to act by itself, and it is unlikely to refrain from standing pat.

"Instead RBNZ is likely to leave the door wide open for further rate cuts so as to put as much distance as possible between itself and the Fed", says Commerzbank in a research note.