NZD/USD remains under pressure near 0.5605 during early Asian trading on Tuesday, weighed down by mounting expectations that the Reserve Bank of New Zealand (RBNZ) will cut interest rates at its November meeting on Wednesday. Traders will also be watching US ADP Employment Change, Retail Sales, and Producer Price Index (PPI) data due later in the day for further direction.
Economists broadly expect the RBNZ to lower its Official Cash Rate (OCR) by 25 basis points to 2.25%. Policymakers may also signal openness to additional easing in 2026 if economic conditions deteriorate. The RBNZ’s dovish posture is likely to keep the New Zealand Dollar (NZD) under selling pressure in the near term. “Our base case is that November will bring the last OCR cut, but the risk remains for further easing in 2026,” said Nick Tuffley, chief economist at ASB Bank in Auckland.
Meanwhile, heightened expectations of a Federal Reserve rate cut in December continue to weigh on the US Dollar (USD), potentially limiting downside pressure on the pair. According to the CME FedWatch Tool, markets are now pricing in close to an 80% chance of a 25-basis-point cut next month, up sharply from 30% last week.
Traders will look to the latest US economic indicators for clarity. Tuesday’s PPI inflation data and Retail Sales figures will be key, with any signs of softer inflation likely to reinforce Fed easing expectations—pressure that could further weaken the Greenback against the Kiwi.
