NZD/USD drops as Fed-RBNZ policy divergence widens

NZD/USD declined 0.5% to 0.6180 as diverging monetary policies between the Federal Reserve and Reserve Bank of New Zealand weigh on the kiwi dollar. The RBNZ's recent dovish pivot, cutting rates by 25 basis points to 4.75%, contrasts sharply with the Fed's steady stance maintaining rates at 5.25-5.50%. New Zealand's central bank cited weakening economic growth and moderating inflation pressures, suggesting further easing may be necessary. Meanwhile, the Fed remains focused on bringing US inflation back to its 2% target, maintaining its higher-for-longer narrative. Technical indicators show NZD/USD breaking below the 0.6200 psychological support, with next targets at 0.6150 and 0.6100. The 50-day moving average at 0.6230 now acts as resistance. This widening rate differential could pressure the kiwi further, especially if upcoming US economic data reinforces Fed hawkishness while New Zealand's economy continues softening.