The central bank is expected to leave its official cash rate unchanged at 1.75%.
ASB chief economist Nick Tuffley said the language the Reserve Bank chose to use on Thursday was likely to have a significant impact.
''We expect no change to the ending of the statement. Any adjustment there could bring forward market pricing for the timing of the next interest rate rise.''
Inflation had firmed to 2.2%, once again ahead of both market and, particularly, Reserve Bank estimates. The composition of increased inflation was characterised by temporary factors, including food prices and petrol.
The Reserve Bank was likely to look through higher prices, he said.
''Our inflation outlook for 2017 shows inflation around the 2% mid-point for the rest of 2017 before temporarily softening in the first half of 2018, which is when current market pricing suggests the Reserve Bank will begin tightening the OCR.''
The language about the New Zealand dollar was likely to be tweaked, given the dollar's continued under-performance in relation to the Reserve Bank's forecasts, he said.
At the March OCR review, the Reserve Bank said the dollar's depreciation was ''an encouraging move'' but further depreciation was needed to achieve more balanced growth.
Given the dollar had softened further since that statement, there would be a tweak towards: ''The further depreciation in the dollar since March is encouraging, but further depreciation is 'desirable' to achieve more balanced growth,'' Mr Tuffley said.
BNZ currency strategist Jason Wong said the dollar had recently been sold down to a level not seen since the middle of last year, unwinding the strength seen over the second half of last year and early this year.
In the three months ending April, the New Zealand trade-weighted index (a basket of currencies of New Zealand's major trading partners) was down by more than 6%.
There were large falls on all the major crosses.
''The extent of the fall has surprised us, as it has gone against supportive forces.''
Intra-year falls of more than 5% had occurred every year for the past five years. But those intra-year falls had all been in the context of a flat to higher TWI in the five-year period, he said.
New Zealand dollar weakness had seen the TWI move down to within 2% of the BNZ's long-term fair value estimate based on purchasing power parity. It had spent much of the time in the past 15 years above the long-term estimate, a reflection of New Zealand's strong terms of trade.
''What makes the recent fall in the dollar more remarkable, compared to other episodes, is that it has come over a time when fundamental factors have been generally supportive.''
At the end of April, the gap between the spot and fair value of the dollar had extended to 8%, the largest gap since March 2009 - or the depths of the global financial crisis, Mr Wong said.
Various global commodity price indices recently reached fresh lows for the year and had been flat overall for the past year.
In contrast, the New Zealand export commodity price index had managed to sustain the strong run-up in prices seen through last year.
Some of the dollar's fall in early March could be attributed to a plunge in dairy prices. However, whole milk powder prices had since recovered by about 20% and that had not been reflected in a stronger dollar, he said.
The BNZ year-end target for the dollar had been US67c since August last year and it had left the forecast unchanged.
Mr Wong believed the recent selling of the dollar had not been justified and there could be a recovery of sorts into the low US70c range in coming weeks and months.
The Reserve Bank of Australia seems content to leave interest rates on hold at 1.5% this year after slightly raising its growth forecast for next year.
The RBA's quarterly Statement on Monetary Policy forecasts gross domestic product to rise 2.75% to 3.75% in 2018, up from 2.5% to 3.5% previously.
''The cash rate is assumed to move broadly in line with market pricing,'' the RBA said in the statement on Friday.
