NZD/USD drops to near 0.5800 due to the dovish mood surrounding the RBNZ policy outlook

NZD/USD receives downward pressure as the RBNZ is highly expected to deliver a 50 basis point rate cut in November.

The US Dollar Index rose to a fresh yearly high of 107.20 during the European session on Friday.

Traders await the US S&P Global PMI data scheduled to be released in the North American session.

NZD/USD extends its losing streak for the third consecutive day, trading around 0.5830 during the European hours on Friday. This downside of the NZD/USD pair is attributed to growing expectations that the Reserve Bank of New Zealand (RBNZ) could deliver a bumper interest rate cut next week.

Markets are fully anticipating a 50 basis point cut in the RBNZ's cash rate to 4.25% at next week's monetary policy meeting, aligning with the reduction seen in October. Additionally, there is a 25% probability priced in for a more aggressive 75-basis-point cut.

On Thursday, New Zealand's Treasury Chief Economic Adviser, Dominick Stephens, indicated that economic and fiscal forecasts are likely to be revised downward, citing a prolonged slowdown in productivity.