NZD/USD plunges as RBNZ signals aggressive rate cut cycle ahead

NZD/USD tumbled sharply following the Reserve Bank of New Zealand's dovish policy shift, with the pair dropping over 1.2% to test support near 0.5920. The RBNZ's August policy report revealed a more pessimistic economic outlook, prompting Deputy Governor Hawkesby to signal additional rate cuts ahead, though maintaining a data-dependent approach. The dovish stance triggered broad NZD weakness, with AUD/NZD surging to test higher timeframe resistance levels around 1.1050. Market attention now shifts to UK CPI data, with analysts expecting inflation to remain sticky, potentially influencing GBP pairs' volatility. Technical indicators suggest NZD/USD faces immediate resistance at 0.5980, while a break below 0.5900 could accelerate losses toward 0.5850. The RBNZ's pivot represents a significant shift in monetary policy stance, suggesting prolonged NZD weakness as the central bank prioritizes economic growth over inflation concerns.