The Reserve Bank of New Zealand, or RBNZ, surprised the markets by cutting interest rates by 50 basis points to 4.25% in November. This move came despite speculation that the bank might consider an even larger cut of 75 basis points. The market had priced in a 57 basis point cut, setting the stage for volatility. Following the announcement, the NZD/USD exchange rate experienced a significant bounce, influenced by the RBNZ’s decision and the ongoing debate that only a smaller cut was on the table. Traders should watch this currency pair closely as it may continue to fluctuate in the wake of these developments. The recent shift showcases the RBNZ’s commitment to supporting the economy and indicates a strategic move to maintain competitiveness in the markets.