FX.co ★ Kiwi Stays Weak Ahead of RBNZ Decision

The New Zealand dollar is trading around $0.561, staying close to a seven-month low, influenced by market expectations of a rate cut from the Reserve Bank this week. Market anticipations include a fully priced-in 25 basis point reduction, with a minor possibility of an unexpected 50 basis point cut, similar to the one in October, considering the high unemployment rate and sluggish economic growth. Investors are keenly awaiting the central bank's guidance post-decision, as analysts predict this move could represent the last cut in the current cycle of easing, barring any significant deterioration in global economic circumstances. Meanwhile, the Reserve Bank of New Zealand's November Financial Stability Report highlighted continued high risks to financial stability amidst broader uncertainty and uneven economic performance. Additionally, the US dollar has gained strength as Federal Reserve officials remain divided on the future policy direction. Since July, the NZD has already depreciated by nearly 8%.