NZDUSD Drops as Economy Shrinks: Rate Cuts Expected

NZDUSD Analysis – The New Zealand dollar fell below $0.60, reaching its lowest point in four months as the US dollar got more robust. This was because investors expect that interest rates in the US might stay high for a while, even though they’re beginning to decrease in other big economies.

The latest numbers in New Zealand were surprising, showing the country’s economy shrank in the last quarter. This downturn, a 0.1% drop in the December quarter after a 0.3% fall previously, means New Zealand is now in what’s called a technical recession.

These results were unexpected, as experts thought the economy would grow by 0.1%. Because of this, investors are now betting there’s a more than half chance the Reserve Bank of New Zealand will cut interest rates in July, with a slight rate reduction fully expected in August.

NZDUSD Drops as Economy Shrinks