The Reserve Bank of New Zealand (RBNZ) has cut the official cash rate to 2.25%, marking its latest move in easing monetary policy. However, the central bank indicated this is likely the final rate cut for the current cycle. In fact, the RBNZ’s board debated whether to hold rates steady or implement another cut at this meeting.

Looking ahead, the RBNZ’s projections suggest the overnight cash rate will remain at 2.25% into early 2026 before rising modestly to 2.65% by late 2027. Although this outlook is lower than previous forecasts, it has reassured markets there will be no further rate reductions after more than 300 basis points of cuts since the cycle began in August 2024.

Following the announcement, the New Zealand dollar (NZD) rallied, with NZD/USD approaching the 0.5700 level. However, the pair encountered resistance near the mid-November highs around 0.5690 to 0.5695, where sellers have established a firm barrier that limits further upside momentum.

Despite a broadly positive risk environment this week, NZD/USD has struggled to gain sustained traction—an indication of underlying bearish sentiment for the kiwi dollar. The pair remains within a long-established downtrend defined by a series of lower highs and lower lows, persisting since July.

For NZD/USD to change direction and break this downtrend, buyers will need to overcome significant selling pressure. Until the pattern is broken, sellers retain the upper hand and are likely to maintain their conviction in the pair’s downside momentum.

Original Source: Justin Low of investinglive.com