Kiwi Dollar Rises 1% After RBNZ’s Smaller-Than-Expected Rate Cut

The New Zealand dollar jumped roughly 1% against the U.S. dollar on Wednesday after the Reserve Bank of New Zealand (RBNZ) announced a 50-basis-point rate cut, falling short of market expectations for a more aggressive 75-basis-point reduction.

The RBNZ lowered the official cash rate to 4.25% from 4.75% and signaled further monetary easing ahead. The move comes as inflation nears the central bank’s target, and policymakers aim to stimulate the economy and expedite recovery from the current recession.

In its statement, the RBNZ maintained a dovish tone, forecasting another 50-basis-point cut in February. Policymakers expect rates to settle between 2.5% and 3.5%—a range considered neutral—by the end of 2025.

While the smaller-than-expected rate cut triggered some short covering, the Kiwi’s larger bearish trend remains intact. Negative fundamentals and a technically weak outlook on both daily and weekly charts continue to weigh on the currency.

Adding to bearish sentiment, last week’s close below the previous support at 0.5850 (April/July lows) strengthens the case for further downside.

Resistance and Outlook
Upside moves face strong barriers at the 0.5910/35 zone, which includes the Nov. 20 lower high, the 20-day moving average, and the 23.6% Fibonacci retracement of the 0.6378/0.5796 downtrend.

A rejection at this zone would reinforce the bearish trend, while a sustained break above could signal a stronger corrective rebound.