New Zealand: RBNZ cuts OCR by 50 bps – UOB Group

FXStreet Insights Team FXStreet

The Reserve Bank of New Zealand (RBNZ) decided to reduce the official cash rate (OCR) by 50 bps to 4.75%. In the accompanying media release, the RBNZ flagged that the ‘Committee agreed that it is appropriate to cut the OCR by 50 basis points to achieve and maintain low and stable inflation, while seeking to avoid unnecessary instability in output, employment, interest rates, and the exchange rate’, UOB Group economist Lee Sue Ann notes.

RBNZ decides to reduce the official cash rate

“The Reserve Bank of New Zealand (RBNZ) slashed its official cash rate (OCR) from 5.25% to 4.75% earlier today, marking its second straight reduction since it unexpectedly cut in August. The RBNZ said then, that the pace of further easing will depend on how confident it is about a low inflation environment.”

“We had already anticipated the RBNZ to continue easing. However, we were looking for a 25bps cut today, with the view that the RBNZ will not have received 3Q24 data on growth, inflation nor employment since the 25 bps cut in August.”

“Our current view is for a further 175 bps of rate cuts to a terminal rate close to 3.00% by this time next year. And we are keeping to our view of a 25 bps cut at the next monetary policy meeting on 27 Nov. However, we will be relooking at our forecasts following the release of 3Q24 CPI data on 16 October.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD: US Dollar comeback in the makes?

The US Dollar stands victorious at the end of another week, with the EUR/USD pair trading near a four-week low of 1.1742, while the USD retains its strength despite some discouraging American data released at the end of the week. The pair edged higher on Friday, after the United States Supreme Court ruled against President Donald Trump's tariffs, although the advance is not enough to change the latest USD flow.

GBP/USD braces for more pain, as 200-day SMA tested

GBP/USD broke the previous week’s consolidation to the downside, as sellers returned with pomp, smashing the major back toward the levels last seen in late January. The pair tested bids below the 1.3450 barrier as the US Dollar strength largely played out throughout the week, while the Pound Sterling stepped back on expectations of divergent monetary policy outlooks between the Bank of England and the US Federal Reserve.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.

Week ahead: Markets brace for heightened volatility as event risk dominates

Dollar strength dominates markets as risk appetite remains subdued. A Supreme Court ruling, geopolitics and Fed developments are in focus. Pivotal Nvidia earnings on Wednesday as investors question tech sector weakness. Yen and aussie diverge; both pound and euro could recoup their losses.

Broadening drivers of growth: Unpacking GDP and looking ahead

This week’s data delivered a familiar theme with an important twist. The U.S. economy continues to be shaped by powerful forces in high-tech and AI-related investment, but recent releases suggest the growth story may finally be broadening. At the same time, trade flows are moving in a less supportive direction, reminding us that not all parts of the economy are pulling in sync.

Ripple bulls defend key support amid waning retail demand and ETF inflows

XRP ticks up above $1.40 support, but waning retail demand suggests caution. XRP attracts $4 million in spot ETF inflows on Thursday, signaling renewed institutional investor interest.