The NZD/USD pair edged lower, trading below the 0.5650 mark, following a weaker-than-expected GDP report that has reignited expectations of a dovish shift by the Reserve Bank of New Zealand (RBNZ). The economy contracted by 0.2% in the latest quarter, falling short of forecasts and stoking fears of a prolonged slowdown. This disappointing data has reinforced market bets that the RBNZ may pivot toward rate cuts to support growth, pressuring the New Zealand dollar.
Traders are now closely monitoring signals from the RBNZ, as well as global risk sentiment, to gauge the currency’s direction. With the U.S. dollar retaining its strength amid a cautious market environment, the NZD/USD could face further downside risks if the economic outlook worsens.
