The New Zealand Dollar is trading higher against its US counterpart on Wednesday, boosted by a “hawkish cut” by the Reserve Bank of New Zealand RBNZ) and heightened hopes that the US Federal Reserve will cut rates in December. The pair’s rally, however, met resistance at the 0. 5690 area before pulling back to levels sub-0. 5670., The RBNZ cut its OCR rate by 25 basis points to a three-year low of 2. 25%, as widely expected on Wednesday, but signalled the end of the easing cycle, as New Zealand’s economy starts to show signs of recovery. The central bank’s monetary policy statement stated that further rate cuts will depend on the evolution of the medium-term inflation and on the economic prospects. The bank also projected the cash rate to be at 2. 20% in the first quarter of 2026 and at 2. 65% in adt the end of 2027 Fed cut hopes are weighing on the USD The Kiwi dollar rallied across the board, following the monetary policy decision, appreciating a maximum of 1. 4% against the US Dollar, before trimming some gains during the European trading session. The Greenback, in turn, remains on the defensive, following a batch of downbeat US macroeconomic releases. September’s delayed US Retail Sales report disappointed, while producer prices remained steady, and consumer confidence deteriorated, with households wary about the higher prices and the worsening job prospects. Wednesday’s figures add to evidence that the US economy is going through a soft patch and make a case for further Fed rate cuts in December. Later today, the US Durable Goods Orders, an advanced indicator of manufacturing activity, is expected to show a slowdown in September, while jobless claims are expected to rise. Not the best news for the US Dollar.
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NZD/USD’s post-RBNZ rally finds resistance above 0.5690
