NZD/USD licks its wounds above 0.5815 after a post-RBNZ selloff 

• The New Zealand Dollar dropped beyond 1% after a dovish cut by the RBNZ.
• The bank cut rates by 25 bps, with two policymakers voting for a 50 bps cut.
• The US Dollar remains firm with all eyes on the Fed.

The New Zealand Dollar is the worst performer of the G8 currencies so far on Wednesday. The pair has lost more than 1% against the US Dollar, following a "dovish cut" by the Reserve Bank of New Zealand earlier today, which sent the pair to four-month lows at 0.5815.

New Zealand's central bank trimmed its Official Cash Rate (OCR) by 25 basis points to 3%, as widely expected, but the bank statement revealed that two policymakers voted for a half-point rate cut, which sent the Kiwi tumbling across the board.

The RBNZ hints at further rate cuts

The bank observed that economic growth had stalled over the previous months, with rising prices hampering consumer spending and the labour market softening in a context of global uncertainty.

Governor Hawkesby remained confident that the fiscal outlook and the declining government spending would contribute to keeping inflationary pressures in check, which points to further monetary easing down the road.

The US Dollar, on the other hand, remains firm, favoured by a sour market sentiment with all eyes on the Fed. The release of the minutes of the last FOMC meeting is expected to shed some light on the division among policymakers, although the highlight of the week will be Fed Chairman Powell's conference on Friday.

Investors will be eager to know whether recent macroeconomic figures, and especially the Nonfarm Payrolls shock in the first week of the month, have moved the Fed chief to consider rate cuts, even with the risk of tariffs looming. Powell´s comments are expected to set the US Dollar's near-term direction.