The Reserve Bank of New Zealand’s dovish policy shift, cutting the Official Cash Rate to 2.5%, sent the New Zealand dollar tumbling to its lowest since April.
Key moves
- RBNZ cuts OCR to 2.5% and signals two additional cuts, sparking a 50‑bp cut debate among members.
- NZDUSD slips to 0.8520, its lowest level since April.
- NZD pairs see increased implied volatility ahead of the RBNZ announcement.
- EUR/NZD breaks above 1.9900 following the dovish tone.
- AUD/NZD tests higher‑timeframe resistance after the RBNZ decision.
- Risk‑off sentiment spreads across Asia‑Pac, pressuring equities and high‑beta FX.
Summary
With the RBNZ’s policy shift anchoring the day, markets remained cautious, awaiting Friday’s Jackson Hole symposium and key data releases such as the UK CPI, Europe’s final HICP, and the FOMC minutes.
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