The New Zealand dollar fell more than 1% to $0.582 on Wednesday, hitting its lowest level since mid-April after the Reserve Bank cut interest rates as expected and signaled scope for further easing.
The central bank slashed its official cash rate by 25bps to a three-year low of 3%, bringing its easing cycle so far to a whopping 250bps, as policymakers moved to revive a struggling economy and shield it against risks from US tariff policy.
The RBNZ also lowered its projected floor for the cash rate to 2.55%, from 2.85% forecast in May.
After the announcement, markets quickly price two more rate cuts by year-end, assigning a 50% chance of a move in October and 100% for November.
The kiwi also faced additional pressure from a rising US dollar, as traders awaited Federal Reserve Chair Jerome Powell's speech at the Jackson Hole Symposium later this week for more clues on US rate trajectory.
Elsewhere, NZ's two-year swap rates dropped to 2.91%, the lowest since early 2022.
