NZD/USD rallies as RBNZ cuts 25bps but signals pause in easing cycle

NZD/USD surged 0.8% to 0.5920 following the Reserve Bank of New Zealand's decision to cut interest rates by 25 basis points to 4.25%, while signaling a potential end to its easing cycle. The hawkish undertones in the RBNZ's statement surprised markets, with officials indicating that current rate levels may be sufficient to achieve their inflation targets. The central bank noted improving economic conditions and stable inflation expectations near the 2% target. Technical indicators show NZD/USD breaking above the 50-day moving average at 0.5885, with immediate resistance at 0.5950. The AUD/NZD cross weakened 0.5% as the kiwi outperformed its Australian counterpart. Traders are now focusing on upcoming New Zealand retail sales data for further directional cues. The RBNZ's cautious stance contrasts with expectations for continued Fed easing, potentially supporting NZD/USD in the near term.