• NZD/USD plummets below 0.6100 as the RBNZ reduced its OCR further by 50 bps to 4.75%.
• The RBNZ was expected to deliver a hefty rate cut amid weak growth prospects.
• Investors await the FOMC minutes for fresh cues on the interest rate outlook.

The NZD/USD pair faces an intense sell-off and slides below the round-level support of 0.6100 in Wednesday’s North American session. The Kiwi pair plunges as the Reserve Bank of New Zealand (RBNZ) has cut its Official Cash Rate (OCR) by 50 basis points (bps) to 4.75%.

The RBNZ was expected to deliver a larger-than-usual interest rate cut due to softening labor market conditions and subdued growth. Market participants expect the RBNZ to reduce interest rates at a similar pace again in November.

Meanwhile, dismal market sentiment due to Middle East risks has also dampened the appeal of risk-sensitive assets. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, climbs to near 102.70.

The US Dollar strengthens as traders have priced out the scenario of the Federal Reserve (Fed) to reduce interest rates again by 50 bps in November. The Fed started the policy-easing cycle with a sizeable cut of 50 bps in September. Meanwhile, investors await Federal Open Market Committee (FOMC) Minutes for the September meeting, which will be published at 18:00 GMT.

NZD/USD weakens after breaking below the horizontal support plotted from the September 11 low of 0.6100 on a daily timeframe. The overall trend of the Kiwi pair has become bearish as it has formed a lower swing low. The asset is also trading below the 50-day Exponential Moving Average (EMA), which trades around 0.6173.