Select Language

NZD/USD recovers half of RBNZ policy-related losses, outlook remains weak

Breaking news

NZD/USD recovers half of RBNZ policy-related losses, outlook remains weak

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.10.08 20:39
NZD/USD recovers half of RBNZ policy-related losses, outlook remains weak

update 2025.10.08 20:39

  • NZD/USD recovers some of its early losses driven by RBNZ's surprise 50 bps interest rate cut announcement.
  • The RBNZ has kept the door open for further monetary policy easing.
  • Global political developments have increased the safe-haven demand of the US Dollar.

The NZD/USD pair claws back half of its early losses and rebounds to near 0.5775 during the late European trading session on Wednesday. Still, the Kiwi pair is down 0.4%.

The pair faced selling pressure after the monetary policy announcement by the Reserve Bank of New Zealand (RBNZ) in which it surprisingly reduced its Official Cash Rate (OCR) by 50 basis points (bps) to 2.5%. Economists also anticipated an interest rate cut from the RBNZ, but at a regular pace of 25 bps.

RBNZ members said in the monetary policy statement that the door of further monetary policy easing remains open, citing downside risks to inflation and economic activity.

Higher-than-expected interest rate cuts by the RBNZ had boded poorly for the New Zealand Dollar (NZD).

Meanwhile, sheer strength in the US Dollar (USD) is also weighing on the Kiwi pair. The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, revisits the two-month high near 99.00.

The US Dollar performs strongly as its safe-haven demand has increased amid political developments in Japan and France.

Going forward, ongoing United States (US) government shutdown is expected to limit the US Dollar's upside. On Tuesday, US President Donald Trump threatened that the White House would cut spending programs as the government enters its second week of shutdown. Trump also stated that he will provide details about lay-offs in federal agencies in next four or five days.

Economic Indicator

RBNZ Interest Rate Decision

The Reserve Bank of New Zealand (RBNZ) announces its interest rate decision after each of its seven scheduled annual policy meetings. If the RBNZ is hawkish and sees inflationary pressures rising, it raises the Official Cash Rate (OCR) to bring inflation down. This is positive for the New Zealand Dollar (NZD) since higher interest rates attract more capital inflows. Likewise, if it reaches the view that inflation is too low it lowers the OCR, which tends to weaken NZD.

Read more.

Last release: Wed Oct 08, 2025 01:00

Frequency: Irregular

Actual: 2.5%

Consensus: 2.75%

Previous: 3%

Source: Reserve Bank of New Zealand

The Reserve Bank of New Zealand (RBNZ) holds monetary policy meetings seven times a year, announcing their decision on interest rates and the economic assessments that influenced their decision. The central bank offers clues on the economic outlook and future policy path, which are of high relevance for the NZD valuation. Positive economic developments and upbeat outlook could lead the RBNZ to tighten the policy by hiking interest rates, which tends to be NZD bullish. The policy announcements are usually followed by interim Governor Christian Hawkesby's press conference.


Date

Created

 : 2025.10.08

Update

Last updated

 : 2025.10.08

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Fed Minutes to shed light on rate cut path amid ongoing government shutdown

The Minutes of the United States (US) Federal Reserve's (Fed) September 16-17 monetary policy meeting will be published on Wednesday at 18:00 GMT.
New
update2025.10.08 22:15

Gold's record run stretches further above $4,000, traders eye Fed Meeting Minutes

Gold (XAU/USD) marks another milestone on Wednesday, smashing through the $4,000 level for the first time as investors flock to the precious metal amid global economic and political uncertainty, coupled with a dovish Federal Reserve (Fed) outlook.
New
update2025.10.08 21:34

USD/CNH is likely to edge higher - UOB Group

US Dollar (USD) is likely to edge higher, potentially breaking above 7.1550. In the longer run, the price action suggests that USD could rise toward 7.1650, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
New
update2025.10.08 21:18

USD/JPY: Further USD strength is likely - UOB Group

Impulsive momentum is likely to outweigh overbought conditions, but it remains to be seen if US Dollar (USD) can break above 153.00. In the longer run, further USD strength is likely; the level to watch is 153.80, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
New
update2025.10.08 21:15

NZD/USD: Next support at 0.5690 is unlikely to come into view - UOB Group

Scope for New Zealand Dollar (NZD) to test 0.5720; the next support at 0.5690 is unlikely to come into view. In the longer run, outlook for NZD has shifted to negative; the level to watch is 0.5690, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
New
update2025.10.08 21:13

EUR trading defensively on weaker German IP - Scotiabank

The Euro (EUR) is soft, down 0.3% against the US Dollar (USD) on the back of a weaker than expected industrial production release from Germany, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
New
update2025.10.08 21:03

AUD/USD: Likely to head lower and test the 0.6555 support level - UOB Group

Increasing downward momentum suggests Australian Dollar (AUD) is likely to head lower and test the 0.6555 support level. In the longer run, the odds of AUD breaking below 0.6555 are increasing, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
New
update2025.10.08 20:59

CAD flat and outperforming on crosses - Scotiabank

The Canadian Dollar (CAD) is trading flat from Tuesday's close and extending its recent consolidation around a cluster of key technical levels, a relative performer against all of the G10 currencies in an environment of broad-based US Dollar (USD) strength, Scotiabank's Chief FX Strategists Shaun Os
New
update2025.10.08 20:56

GBP/USD: Might drop to 1.3385 before recoverin - UOB Group

Pound Sterling (GBP) could drop to 1.3385 before recovering; the major support at 1.3325 is not expected to come into view.
New
update2025.10.08 20:51

NZD tumbles on surprise 50bpt rate cut - Scotiabank

The US Dollar's (USD) gains are extending into Wednesday's NA session with broad strength against all of the G10 currencies. NZD is underperforming, down 0.6% on the back of an unexpectedly large RBNZ rate cut, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
New
update2025.10.08 20:48

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel