The New Zealand dollar traded around $0.561, hovering near a seven-month low, pressured by expectations that the Reserve Bank will deliver a rate cut this week. Markets are fully pricing in a 25 bps reduction, with a small chance of another surprise 50 bps move, similar to October’s, given the backdrop of high unemployment and a sluggish economy. However, traders will closely watch the central bank’s guidance following the decision, as analysts suggest this could mark the final cut in the current easing cycle unless global economic conditions worsen significantly. At the same time, the RBNZ’s November Financial Stability Report noted that risks to financial stability remain elevated amid broader uncertainty and uneven economic performance. Adding to the currency’s weakness, the US dollar strengthened as Federal Reserve officials remain divided on the policy outlook. The NZD has already slid nearly 8% since July.