The New Zealand dollar is attracting some sellers as the RBNZ cut interest rates by 50 basis points

The New Zealand dollar is depreciating during Wednesday’s Asian session.
As expected, the RBNZ cut interest rates by 50 basis points to 4.75%.
The focus will be on the FOMC’s September minutes on Wednesday.

The New Zealand dollar (NZD) loses momentum on Wednesday to almost its lowest level since mid-August. The Reserve Bank of New Zealand (RBNZ) at its October meeting, as widely expected, decided to reduce the Official Cash Rate (OCR) by 50 basis points (bps) from 5.25% to 4.75%. Kiwi attracts some sellers with its immediate reaction to the interest rate decision. Moreover, Chinese officials are disappointing traders without much stimulus. This in turn causes the replacement value of China’s NZD currency to decline against the US dollar, as China is New Zealand’s main trading partner.

Going forward, investors will be closely monitoring the minutes of the Federal Open Market Committee (FOMC) meeting on Wednesday. On Thursday, attention will focus on the US Consumer Price Index (CPI) data for September. If the report shows a worse-than-expected result, it could weigh on the USD and aid limit the pair’s losses.

Daily Digest Market Changes: New Zealand Dollar Remains Weak After RBNZ Interest Rate Decision

According to the RBNZ’s Monetary Policy Statement (MPS), the committee estimates that annual consumer price inflation is within its target inflation range of 1 to 3%.
The committee agreed that it was appropriate to reduce the OCR by 50 basis points to achieve and maintain low and stable inflation, while seeking to avoid unnecessary volatility in output, employment, interest rates and the exchange rate, the RBNZ MPS noted.
Federal Reserve (Fed) Vice Chairman Philip Jefferson said on Tuesday that the U.S. central bank’s 50 basis point (bps) interest rate cut in September was aimed at keeping the labor market sturdy even as inflation continues to decline, according to Reuters.
Atlanta Fed President Raphael Bostic said Tuesday that the labor market showed no signs of weakening, adding that despite significant progress on inflation, overall price data had not yet met target levels.
New York Fed President John Williams said he strongly supports a 50 basis point (bp) rate cut at the last meeting and that two additional 25 basis point cuts this year are “a pretty reasonable representation of the base case,” according to Reuters .

Technical Analysis: New Zealand Dollar Returns to Downtrend

The New Zealand dollar is falling during the day. The NZD/USD pair continues its downtrend by crossing above the key 100-day exponential moving average (EMA) and is poised to break below the uptrend channel on the daily chart. The downward momentum is supported by the 14-day relative strength index (RSI), which is below the midline near 41.10, supporting sellers in the near term.

A decisive break below the lower boundary of the trend channel at 0.6135 could pave the way to the psychological level of 0.6000. Staying below this level could lead to a decline towards 0.5974, the August 15 low.

On the other hand, the 100-day EMA at 0.6142 is an immediate resistance level for this pair. A sustained rally will see it rise to 0.6254, the September 6 high. An additional bullish filter to watch is 0.6300, a round number on the way to 0.6365, the upper boundary of the trend channel.