NZD/USD rebounds as RBNZ delivers expected 25bp rate cut to 4.25%

NZD/USD has bounced 0.2% to 0.5885 following the Reserve Bank of New Zealand's widely anticipated 25 basis point rate cut, bringing the Official Cash Rate down to 4.25%. The central bank cited easing inflation pressures as justification for the move, with annual CPI now tracking closer to the 1-3% target band. Interestingly, RBNZ minutes revealed some policymakers considered keeping rates unchanged, suggesting a more cautious approach to future easing. The initial dip in NZD/USD was quickly bought, indicating market participants had already priced in a more aggressive easing cycle. Technical indicators show immediate resistance at 0.5900, with support established at 0.5850. The pair's reaction suggests traders view the RBNZ's measured approach as potentially supportive for the kiwi dollar medium-term, especially if economic data continues to show resilience.