Post #15382

Kiwi Surges on a Hawkish Cut NZD/USD ripped more than 1% on the day, lifting just shy of the 0.5700 handle. The surge came after the RBNZ cut rates by 25 bps, but delivered a hawkish surprise. Officials signaled the easing cycle is likely done — with no discussion of a deeper 50-bp cut and forward guidance showing only a small chance of one more cut next year. One committee member even preferred no cut at all, reinforcing the hawkish tone. Traders immediately scaled back expectations for future easing, sending NZD sharply higher and two-year swap rates to two-month highs. A central bank hinting that “we’re done cutting” is fuel for a currency — especially when markets were leaning dovish heading into the meeting. If momentum holds, NZD/USD could attempt a breakout above 0.5700. But if sellers defend that level — we could see a fade back toward 0.5550. The next moves will depend on whether markets believe the RBNZ’s message that the floor is now in for rates. - Alan