Unexpected RBNZ decision to hold rates steady sends New Zealand Dollar sharply lower

The New Zealand Dollar lags its peers after the RBNZ keeps policy rates unchanged.
Expectations had pointed to a 25 bps increase in the RBNZ’s OCR to 3%.
An unchanged interest rate decision from the Fed remains investors’ expectation.

Heavy selling weighs on the New Zealand Dollar (NZD) against its major currency peers on Wednesday, with the kiwi down 1.28% against the US Dollar (USD) to around 0.5600.

How Is the New Zealand Dollar Performing Today?

The New Zealand Dollar (NZD) recorded its weakest performance against the Australian Dollar today. Its percentage movements against the major currencies listed are set out in the table below.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.07%	0.16%	-0.02%	0.08%	-0.11%	1.21%	0.19%
EUR	-0.07%		0.09%	-0.09%	0.01%	-0.18%	1.13%	0.12%
GBP	-0.16%	-0.09%		-0.17%	-0.08%	-0.28%	1.05%	0.02%
JPY	0.02%	0.09%	0.17%		0.09%	-0.10%	1.21%	0.18%
CAD	-0.08%	-0.01%	0.08%	-0.09%		-0.19%	1.12%	0.11%
AUD	0.11%	0.18%	0.28%	0.10%	0.19%		1.33%	0.30%
NZD	-1.21%	-1.13%	-1.05%	-1.21%	-1.12%	-1.33%		-1.00%
CHF	-0.19%	-0.12%	-0.02%	-0.18%	-0.11%	-0.30%	1.00%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. To read NZD (base)/USD (quote), for instance, choose the New Zealand Dollar on the left and follow that row across to the US Dollar; the intersecting cell gives the percentage change.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Contrary to widespread expectations of a 25 basis points (bps) increase to 3%, the Reserve Bank of New Zealand (RBNZ) kept the Official Cash Rate (OCR) unchanged at 2.75% at its policy meeting.

Further tightening remains an option, however, with RBNZ Governor Anna Breman signalling more than previously expected.

In its monetary policy statement, the RBNZ said, “More OCR hikes probable, but dependent on economic outlook,” while Reuters quoted RBNZ Governor Breman as saying, “They may even be higher than we said at the September meeting,”

Ahead of the Federal Reserve’s (Fed) monetary policy announcement, the US Dollar is on course for a fourth consecutive trading day of gains on Wednesday. At the time of writing, the US Dollar Index (DXY) is marginally firmer at around 101.43. The index measures the Greenback against six major currencies.

With the Fed widely expected to retain interest rates in the 3.75%-4.00% range, its communication becomes a key influence on the US Dollar’s outlook.

Little change in formal communication is expected from the forthcoming Fed decision, according to economists at Deutsche Bank. They note that “the statement itself [is] to contain only limited changes, although dissents to a hold are possible.” Their assessment is that “the interest will therefore be in Chair Warsh’s press conference and how the Fed balances still-elevated inflation and solid growth against the recent tightening in financial conditions,” as markets are likely to examine his comments closely for any change in the policy narrative.

NZD/USD Technical Analysis: Can the Pair Ease Its Downside Pressure?

A near-term bearish bias persists on the daily chart, where NZD/USD is trading at 0.5614, below its 20-day Exponential Moving Average (EMA) of 0.5663. Failure to hold above this moving average in recent sessions continues to weigh on the pair. Although the Relative Strength Index (RSI), at 39, is recovering from oversold territory, it remains tilted to the downside. This suggests that rebounds below the 0.57 area may still attract selling.

The first upside hurdle is the 20-day EMA near 0.5663. A daily close above it would reduce immediate selling pressure and clear a path towards last week’s highs. With no nearby technical support levels mapped in the current dataset, recent lows offer only a tentative floor. A decisive break below the 0.56 mark would therefore likely leave the pair vulnerable to further losses within the broader downtrend.

Economic Indicator in Focus

What Does the RBNZ Interest Rate Decision Signal?

An interest rate decision is announced by the Reserve Bank of New Zealand (RBNZ) following each of its seven scheduled policy meetings every year. When rising inflationary pressures prompt a hawkish stance, the RBNZ raises the Official Cash Rate (OCR) to curb inflation. Higher interest rates draw additional capital inflows, making such a move positive for the New Zealand Dollar (NZD). Conversely, an assessment that inflation is too low leads the central bank to reduce the OCR, a move that generally weakens NZD.

Read further.

Latest release: Wed 28 Oct 2026 01:00

Release frequency: Irregular

Reported: 2.75%

Market consensus: 3%

Prior reading: 2.75%

Data source: Reserve Bank of New Zealand

Why Should Traders Watch This Release?

The NZD's valuation is particularly sensitive to signals from the Reserve Bank of New Zealand (RBNZ) on the economic outlook and the future course of monetary policy. At its seven monetary policy meetings each year, the central bank announces its interest rate decision alongside the economic assessments underpinning it. Favourable economic developments and an optimistic outlook could prompt the RBNZ to raise interest rates to tighten policy, a move that typically supports the NZD. Interim Governor Christian Hawkesby usually holds a press conference after the policy announcements.

(The technical analysis of this story was written with the help of an AI tool. Know more.)