As expected, the Reserve Bank of New Zealand (RBNZ) cut its Official Cash Rate (OCR) by 25 basis points to 3%. This move pressured NZDUSD; the pair falls almost -1.2% today. The monetary authorities also released an updated rate path, indicating that the OCR could fall to 2.5% by March 2026. This suggests that in the current easing cycle, the market should anticipate two more 25 bp cuts.
- The decision was not unanimous. The Monetary Policy Committee voted 4–2 in favor of a 25 bp cut, with the minority advocating for a more aggressive 50 bp reduction.
- The market reaction was swift. The New Zealand dollar weakened sharply following the RBNZ’s move, while Wellington’s stock market rebounded strongly, with the benchmark index climbing more than 1.5%.
- The decision comes against the backdrop of inflation data. On an annual basis through the end of Q2, CPI stood at 2.7%. The RBNZ projects that inflation will temporarily rise to 3% in Q3 before easing back toward 2% within a year.
- The rate cut received government approval. Finance Minister Nicola Willis emphasized that lower financing costs support business expansion, boost activity in the construction sector, create jobs, and increase household incomes.
According to RBNZ ‘Further data on the speed of New Zealand’s economic recovery will influence the future path of the OCR. If medium-term inflation pressures continue to ease as expected, there is scope to lower the OCR further.’
NZDUSD (Daily interval)
The Kiwi remains under pressure today, with the NZDUSD pair dropping to its lowest level since early April at 0.582. In recent days, it has slipped below the 200-day exponential moving average (EMA200, red line).
Source: xStation5
The material on this page does not constitute financial advice and does not take into account your level of understanding, investment objectives, financial situation or any other specific needs. All information provided, including opinions, market research, mathematical results and technical analyzes published on the Website or transmitted To you by other means, it is provided for information purposes only and should in no way be construed as an offer or solicitation for a transaction in any financial instrument, nor should the information provided be construed as advice of a legal or financial nature on which any investment decisions you make should be based exclusively To your level of understanding, investment objectives, financial situation, or other specific needs, any decision to act on the information published on the Website or sent to you by other means is entirely at your own risk if you In doubt or unsure about your understanding of a particular product, instrument, service or transaction, you should seek professional or legal advice before trading. Investing in CFDs carries a high level of risk, as they are leveraged products and have small movements Often the market can result in much larger movements in the value of your investment, and this can work against you or in your favor. Please ensure you fully understand the risks involved, taking into account investments objectives and level of experience, before trading and, if necessary, seek independent advice.
