NZD jumps on RBNZ ‘hawkish cut’ as Bitcoin slides 30%; Nasdaq extends rally while BofA warns on valuations
The New Zealand dollar surged after a surprise rate cut came with a firm signal the easing cycle is ending, even as a deepening crypto selloff and cautious equity strategists kept risk appetite in check. U.S. tech stocks extended gains led by Nvidia, but Bank of America warned S&P 500 returns could be muted through 2026.
FX: Kiwi leads majors; sterling supported by budget optimism
The NZD outperformed after the Reserve Bank of New Zealand cut its cash rate but indicated it is likely done easing, a classic “hawkish cut” that propelled the currency higher in North American trading on November 26, 2025. A strong rebound in New Zealand’s Q3 retail sales added to the momentum, reinforcing the notion that policy may be nearing an inflection point.
Sterling also firmed, with traders citing supportive headlines around the U.K. budget. Broader FX conditions reflected a modest revival in risk appetite, though pockets of volatility persisted as crypto markets swooned and U.S. equities extended a multi-day climb.
Crypto: Bitcoin drops 30% from record as political narrative shifts
Bitcoin fell roughly 30% from its $126,000 peak, with market chatter tying the move to changing U.S. political odds and the unwinding of the so-called “Trumpism” trade. Economist Paul Krugman argued that shifting political expectations are eroding one pillar of the crypto bull case.
Against the downdraft, Cathie Wood added to positions in BMNR, a crypto-linked play with sizable Ethereum reserves, underscoring ongoing institutional interest in digital-asset balance sheets even as valuations come under pressure.
U.S. stocks: Nasdaq leads a four-day winning streak; Nvidia rallies
Major U.S. indices advanced for a fourth session, with the Nasdaq leading. Nvidia climbed after reiteration of its AI chip leadership narrative; Bernstein kept an Outperform rating and a $275 price target, implying potential upside of about 50%. While AI exposure continued to draw flows, investors remain attuned to concentration risk and the durability of capex-linked earnings.
Strategy watch: BofA projects modest S&P 500 gains by 2026
Bank of America expects the S&P 500 to rise only about 5% by 2026, even amid double-digit earnings growth, as valuation multiples compress. The bank warned liquidity support is thinning, market leadership could rotate toward capex beneficiaries and consumer staples, and AI-linked names face execution and regulatory risks. For cross-asset positioning, that backdrop favors selectivity and disciplined risk management into year-end.
New Zealand growth signals complicate the policy path
A sharp jump in Q3 retail sales in New Zealand complicates the RBNZ’s balancing act. The central bank cut rates but signaled cuts may be over, effectively front-loading easing while attempting to anchor inflation expectations. For FX traders, that mix—improving growth data paired with a higher-for-longer bias relative to peers—helped lift the NZD against most majors.
Key Points
- NZD outperforms after the RBNZ delivers a “hawkish cut” and Q3 retail sales jump.
- GBP rises on supportive budget headlines; broader FX sees mixed risk tone.
- Bitcoin tumbles ~30% from a $126K high as the “Trumpism” trade narrative unwinds; Krugman weighs in.
- Cathie Wood buys BMNR, citing its significant ETH reserves despite valuation concerns.
- Nvidia climbs on AI chip dominance claims; Bernstein reiterates Outperform with a $275 target (~50% upside).
- U.S. equities rise for a fourth straight day, Nasdaq leads.
- BofA sees only ~5% S&P 500 upside by 2026 as multiples compress, liquidity wanes, and leadership shifts toward capex and staples.
What traders are watching
– Whether NZD strength persists if incoming New Zealand data stay firm and the RBNZ holds its hawkish bias.
– Crypto market spillovers into broader risk assets and FX volatility should Bitcoin’s drawdown deepen.
– AI-driven equity leadership durability versus rotation toward defensives and capex beneficiaries, as flagged by Bank of America.
FAQ
Why did the New Zealand dollar rally after a rate cut?
The RBNZ paired its cut with guidance suggesting the easing cycle is likely over. That “hawkish cut” signals policy may not get much looser from here, supporting the NZD—especially alongside stronger-than-expected Q3 retail sales.
What’s driving Bitcoin’s 30% slide from $126,000?
Traders point to shifting U.S. political expectations and the unwinding of the “Trumpism” trade. Commentary from Paul Krugman added to the narrative that the macro tailwinds behind crypto are fading, prompting profit-taking and heightened volatility.
Why is Cathie Wood buying BMNR during a crypto downturn?
BMNR is seen as leveraged to Ethereum via large ETH reserves. For some investors, that balance-sheet exposure is attractive on pullbacks, despite concerns about valuation and sector-wide drawdowns.
What does Bank of America’s outlook mean for equities?
BofA expects only about 5% S&P 500 upside by 2026 as valuation multiples compress despite solid earnings growth. The bank sees thinning liquidity and a potential rotation toward capex beneficiaries and staples, implying more selective stock picking.
How does Nvidia’s rally affect broader tech sentiment?
Nvidia’s gains, backed by an Outperform rating and a $275 price target from Bernstein, reinforce the AI-led growth narrative. That supports tech benchmarks but also heightens concentration risk if leadership remains narrow.
What are the near-term implications for FX markets?
If the RBNZ maintains a hawkish stance and U.K. policy remains supportive, NZD and GBP could retain a bid. However, crypto volatility and shifting risk appetite can still inject noise into USD crosses and broader FX positioning.
This report was produced by BPayNews to inform traders and investors on the latest macro, FX, crypto, and equity market drivers.
Last updated on November 26th, 2025 at 10:16 pm
