Kiwi Dollar Dips Ahead of RBNZ Rate Call
On Tuesday, the New Zealand dollar slightly declined to approximately $0.584, halting its recent upward movement as investors anticipated a more relaxed monetary approach by the Reserve Bank. The market has fully factored in a 25-basis-point cut in interest rates expected on Wednesday, with increasing speculation of a possible larger reduction of 50 basis points. These expectations were further solidified by a weak business sentiment survey, indicating that the economy might have contracted in the third quarter, heightening the risk of slipping back into recession. The discouraging data also sparked further speculation that in order to boost growth, the Reserve Bank of New Zealand (RBNZ) might consider implementing more aggressive policy easing measures in the coming months. Simultaneously contributing to the Kiwi's decline, the US dollar gained strength, as ongoing political stalemates in Washington continued and the government shutdown lingered.
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