8 October 2025,06:10
Daily Market Analysis
8 October 2025, 06:10
*The central bank slashed its cash rate by 50 bps to 2.50%, double expectations, driving NZD/USD to a six-month low of 0.5738.
*Policymakers cited sluggish consumer and business spending and projected economic contraction through mid-2025.
*Dovish guidance and widening rate differentials signal sustained downside risk for the kiwi ahead of the November meeting.
Market Summary:
The New Zealand dollar faced intense selling pressure during the session, with NZD/USD falling to a six-month low of 0.5738 and GBP/NZD rising to its highest level since April. The sharp depreciation followed an unexpectedly aggressive policy move from the Reserve Bank of New Zealand, which cut its official cash rate by 50 basis points—double the 25 bps reduction markets had anticipated.
The RBNZ’s decision was driven by mounting concerns over a stalled economic recovery, reflected in weak household and business spending indicators. The central bank specifically cited projections for softer-than-expected growth through mid-2025, with economic data suggesting contraction in the second quarter and subdued activity extending into the third quarter. This deteriorating outlook prompted policymakers to implement more substantial stimulus to safeguard the economy.
Perhaps more significantly, the central bank explicitly signaled openness to further easing should the recovery falter, strongly hinting at another potential rate cut at its November meeting. The RBNZ’s benchmark rate now stands at 2.50%, creating a widening interest rate differential with most major peers that is likely to sustain downward pressure on the currency in the medium term.
The combination of surprise easing, dovish forward guidance, and deteriorating growth fundamentals suggests the New Zealand dollar will remain vulnerable in the coming months. Market participants are likely to continue pricing in additional monetary support, potentially extending the currency’s bearish trajectory unless global risk sentiment improves substantially or domestic data surprises to the upside.
Technical Analysis
The NZD/USD pair has extended its downward trajectory, declining nearly 2% to establish a fresh six-month low after being rejected during a technical rebound attempt. The formation of a double-top pattern beneath a key liquidity zone provides strong technical confirmation of the bearish bias, indicating that sellers remain firmly in control.
The breakdown follows the Reserve Bank of New Zealand’s surprise 50 basis-point rate cut and subsequent dovish guidance, which has fundamentally reshaped the currency’s outlook. The pair’s inability to sustain any meaningful recovery underscores the persistence of selling pressure, with the double-top formation signaling a failure to overcome resistance despite oversold conditions.
Momentum indicators are aligned with the deteriorating price action. The Relative Strength Index has declined into oversold territory, reflecting intense selling pressure, while the Moving Average Convergence Divergence has generated a bearish crossover—often referred to as a “death cross”—and is now crossing below its zero line. This configuration suggests that bearish momentum is not only present but accelerating.
Resistance Levels: 0.5800, 0.5840
Support Levels: 0.5700, 0.5650
Step into the world of trading with confidence today. Open a free PU Prime live CFD trading account now to experience real-time market action, or refine your strategies risk-free with our demo account.
This content is for educational and informational purposes only and should not be considered investment advice, a personal recommendation, or an offer to buy or sell any financial instruments.
This material has been prepared without considering any individual investment objectives, financial situations. Any references to past performance of a financial instrument, index, or investment product are not indicative of future results.
PU Prime makes no representation as to the accuracy or completeness of this content and accepts no liability for any loss or damage arising from reliance on the information provided. Trading involves risk, and you should carefully consider your investment objectives and risk tolerance before making any trading decisions. Never invest more than you can afford to lose.
Trade forex, indices, metal, and more at industry-low spreads and lightning-fast execution.
Sign up for a PU Prime Live Account with our hassle-free process.
Effortlessly fund your account with a wide range of channels and accepted currencies.
Access hundreds of instruments under market-leading trading conditions.
Trading Platforms
Learn
About PU Prime
Corporate
Please note the Website is intended for individuals residing in jurisdictions where accessing the Website is permitted by law.
Please note that PU Prime and its affiliated entities are neither established nor operating in your home jurisdiction.
By clicking the "Acknowledge" button, you confirm that you are entering this website solely based on your initiative and not as a result of any specific marketing outreach. You wish to obtain information from this website which is provided on reverse solicitation in accordance with the laws of your home jurisdiction.
Thank You for Your Acknowledgement!
Ten en cuenta que el sitio web está destinado a personas que residen en jurisdicciones donde el acceso al sitio web está permitido por la ley.
Ten en cuenta que PU Prime y sus entidades afiliadas no están establecidas ni operan en tu jurisdicción de origen.
Al hacer clic en el botón "Aceptar", confirmas que estás ingresando a este sitio web por tu propia iniciativa y no como resultado de ningún esfuerzo de marketing específico. Deseas obtener información de este sitio web que se proporciona mediante solicitud inversa de acuerdo con las leyes de tu jurisdicción de origen.
Thank You for Your Acknowledgement!
