The New Zealand Dollar (NZD) continued its losing streak for a third straight session on Wednesday, with NZD/USD slipping toward 0.5850 during Asian trading hours. The decline followed the Reserve Bank of New Zealand’s (RBNZ) decision to lower its Official Cash Rate (OCR) by 25 basis points to 3.00%, in line with market expectations.
Meanwhile, the People’s Bank of China (PBoC) kept its one-year Loan Prime Rate at 3.00% and the five-year rate at 3.50%. Given New Zealand’s close trade ties with China, any shift in Chinese monetary policy typically influences the Kiwi dollar.
Adding further pressure, the US Dollar (USD) extended its strength on the back of geopolitical headlines. White House press secretary Karoline Leavitt confirmed that discussions are underway for a bilateral meeting between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy, according to CNN. US President Donald Trump also reiterated that no American troops will be deployed to enforce any potential peace agreement, with security guarantees still being negotiated among the US, European allies, and Ukraine.
Looking ahead, traders will turn their focus to the Jackson Hole Economic Policy Symposium later this week. Markets are particularly awaiting remarks from Federal Reserve Chair Jerome Powell for direction on US monetary policy. According to the CME FedWatch tool, investors are currently pricing in an 86.5% probability of a 25-basis-point Fed rate cut in September.
