Australian Dollar rises following the RBNZ 50 bps interest rate cut
The New Zealand Dollar advanced as the RBNZ reduced its Official Cash Rate by 50 basis points in November.
The risk-sensitive NZD faced challenges following Donald Trump’s announces a plan of increase import tariffs on Chinese goods.
The USD struggles due to bond market optimism following President-elect Donald Trump's decision to nominate fund manager Scott Bessent.
The Zealand Dollar (NZD) breaks its five-day losing streak against the US Dollar (USD) following the Reserve Bank of New Zealand's (RBNZ) interest rate decision on Wednesday. The central bank announced a further cut to its Official Cash Rate (OCR), lowering it by 50 basis points (bps) from 4.75% to 4.25% in November.
The RBNZ justified this rate cut by citing a bleak economic outlook and a decline in inflation, which has now returned to the central bank's target range of 1% to 3%. Earlier this year, the central bank reduced the OCR by 25 bps in August and followed with a 50 bps reduction in October.
The NZD faced challenges due to weaker market sentiment, largely driven by President-elect Donald Trump's announcement of a 10% tariff increase on all Chinese goods entering the United States (US), as well as a 25% tariff on imports from Mexico and Canada. Since China is a significant trade partner for New Zealand, any economic disruption in China has a direct impact on New Zealand's economy.
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