New Zealand Dollar tumbles as RBNZ cuts interest rate by 50 bps
- The New Zealand Dollar edges lower in Wednesday’s early Asian session.
- RBNZ cut the interest rate by 50 bps to 4.75% as anticipated.
- The September FOMC Minutes will be in the spotlight on Wednesday.
The New Zealand Dollar (NZD) loses momentum to near the lowest level since mid-August on Wednesday. The Reserve Bank of New Zealand (RBNZ) decided to cut the Official Cash Rate (OCR) by 50 basis points (bps) from 5.25% to 4.75% at its October meeting, as widely expected. The Kiwi attracts some sellers in an immediate reaction to the interest rate decision. Additionally, Chinese officials disappoint traders without more major stimulus. This, in turn, drags the proxy-China NZD lower against the Greenback as China is a major trading partner to New Zealand.
Moving on, traders will keep an eye on the Federal Open Market Committee (FOMC) Minutes later on Wednesday. On Thursday, the attention will shift to the US Consumer Price Index (CPI) data for September. In case the report shows a softer-than-expected outcome, this could weigh on the USD and help limit the pair’s losses.
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