FX.co ★ New Zealand Dollar Hovers Near 2-Month High

The New Zealand dollar declined to $0.579 yet remained near its highest level in two months. This movement comes amid expectations that the Reserve Bank of New Zealand may have concluded its cycle of rate cuts. Though the central bank reduced its cash rate by 25 basis points last month, its updated forecasts indicated there is limited room for further reductions. It suggested only around a 20% likelihood of another rate cut next year as inflationary pressures diminish and the economic outlook brightens. On Wednesday, RBNZ Governor Anna Breman highlighted the bank's ongoing commitment to a data-dependent and flexible policy approach as economic circumstances continue to change. Presently, market analysts predict that the central bank's subsequent action will be a rate hike, projected not to occur until late 2026. Additional support for the kiwi was bolstered by a weaker US dollar after the Federal Reserve lowered its interest rates by 25 basis points and unveiled a less aggressively hawkish stance than anticipated by some.