New Zealand Dollar softens to near 0.5600 as RBNZ rate cut looms

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The NZD/USD pair loses ground to near 0.5605 during the early Asia session on Monday. The New Zealand Dollar (NZD) weakens against the US Dollar (USD) amid expectations that the Reserve Bank of New Zealand (RBNZ) will deliver a rate cut at the November meeting on Wednesday.  The RBNZ surprised markets with a larger-than-expected reduction, cutting its Official Cash Rate (OCR) by 50 basis points (bps) to 2.50% at its October meeting. The market consensus points to a 25 bps rate cut at the November meeting, bringing the OCR to 2.25%. The RBNZ released its November 2025 Financial Stability Report earlier this month, noting that risks to financial stability remain heightened due to global uncertainty and underperformance in parts of the economy. Traders will closely monitor the message of the RBNZ’s stance after the rate decision. However, less dovish remarks or signs of an end to the RBNZ’s easing cycle could help limit the NZD’s losses in the near term.  On the USD’s front, the dovish comments from the Federal Reserve (Fed) policymakers could undermine the Greenback and act as a tailwind for the pair. New York Fed President John Williams said on Friday that the Fed could still trim interest rates in the near term, without jeopardizing its inflation goal. According to the CME FedWatch tool, Fed funds futures are now pricing in nearly a 74% probability of a 25 basis points (bps) rate cut at the Fed December meeting, up from 40% odds that markets priced a week ago.  New Zealand Dollar FAQs The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make…