NZD/USD hits lowest since October on bigger-than-expected RBNZ rate cut


  • NZD takes a hit as RBNZ cut rates by 50 basis points to 1.00%.
  • Markets were positioned for a 25 basis point cut.
  • NZD/USD fell to the lowest level since October on dovish RBNZ.

NZD/USD slipped to multi-month lows soon before press time on a bigger-than-expected interest rate cut by the Reserve Bank of New Zealand.

The central bank cut the official cash rate (OCR) by 50 basis points to a new record low of 1.00%. The market was priced for a 25 basis point rate cut.

The move to cut rates by 50 basis points has sent NZD lower across the board. The NZD/USD pair is currently trading at 0.6473, representing a 0.80% drop on the day. The pair hit a low of 0.6444 immediately after the RBNZ rate cut. That has been the lowest level since Oct. 10, 2018.

The pair could suffer deeper losses during the day ahead as the central bank has revised lower the OCR forecast for December 2020 to 0.91% from the previous forecast of 1.36%.

The RBNZ also added that the neural interest rate level is now lower and the 50 basis point cut was necessary to support employment and inflation policy.

Pivot levels

    1. R3 0.6658
    2. R2 0.6624
    3. R1 0.6577
  1. PP 0.6543
    1. S1 0.6495
    2. S2 0.6461
    3. S3 0.6414

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD hits two-month lows amid USD strength

EUR/USD has pared its gains that followed upbeat preliminary PMIs for Germany came out above expectations, pointing to a recovery. The USD is advancing amid fears of the coronavirus.

EUR/USD News

GBP/USD drops below 1.31 amid USD strength, fails to sustain PMI gains

GBP/USD is trading below  1.31 after hitting a fresh high of 1.3172. The UK Manufacturing PMI beat with 49.8 and Services PMI with 52.9. The USD is gaining ground across the board.

GBP/USD News

Cryptos: Bears take over and draw a bloody moon

Despite appearances, Bitcoin is the asset with the best risk/benefit ratio. The current falls are adjusted to the ranges of the previous rise. Downward momentum expires in the first half of February.

Read more

Gold rebounds above $1560

The XAU/USD pair dropped to a daily low of $1556.70 during the European trading hours as the easing worries over coronavirus becoming a global epidemic and a broad-based USD strength put the pair under bearish pressure.

Gold News

USD/JPY drops to two-week lows near 109.30

The USD/JPY pair reversed its direction during the American trading hours as the risk-off atmosphere allowed the JPY to find demand as a safe-haven.

USD/JPY News

Forex MAJORS

Cryptocurrencies

Signatures