FX.co ★ New Zealand Dollar Hovers Near 6-Month Low

The New Zealand dollar rose slightly to $0.575 on Friday, yet it still hovers near a six-month low, influenced by the Reserve Bank's dovish monetary stance. Earlier this week, the central bank made a significant move by reducing its official cash rate by 50 basis points, bringing it down to 2.50%—the lowest level seen since July 2022. Moreover, the door is left open for further rate cuts due to ongoing concerns about the country's vulnerable economic condition. The market now anticipates an 80% chance of a 25 basis point rate cut at the Reserve Bank of New Zealand's upcoming meeting in November, along with nearly even chances that rates might dip to 2.0% by the following year. This downward pressure on the kiwi is further exacerbated by the strengthening US dollar, bolstered by the hawkish rhetoric from a few Federal Reserve officials, both reflected in the minutes from September’s meeting and in their continuous comments. Consequently, the New Zealand dollar has dropped more than 1% this week.