NZ Dollar Rises After RBNZ Rate Decision

(RTTNews) - The New Zealand dollar recovered from recent lows against other major currencies in the Asian session on Wednesday, after the Reserve Bank of New Zealand reduced its benchmark rate by a quarter-point, as widely expected.

The Monetary Policy Committee, led by acting governor Christian Hawkesby, decided to cut the Official Cash Rate by 25 basis points to 3.25 percent. The decision was passed by a 5-1 vote.

This was the lowest borrowing costs since August 2022. The bank started its current easing cycle in August 2024.

The economy is recovering after a period of contraction underpinned by higher commodity prices and lower interest rates.

Inflation is forecast to rise to 2.7 percent in the third quarter of 2025 and then return to near the 2 percent target midpoint from 2026, the bank said.

Traders await the U.S. FOMC Minutes, which are due later on the day.

Meanwhile, investors remain cautious amid the lack of concrete progress toward a broader trade agreement between the US and its trading partners, despite reaching temporary deals with some. The ongoing uncertainty surrounding Us-China trade relations continued to weigh on market sentiment.

In the Asian trading today, the NZ dollar rose to a 2-day high of 1.8918 against the euro and more than a 3-week high of 1.0779 against the Australian dollar, from a recent 5-day low of 1.9104 and a 2-day low of 1.0851, respectively. The kiwi may test resistance around 1.87 against the euro and 1.06 against the aussie.

Against the yen, the kiwi advanced to nearly a 2-week high of 86.39 from a recent low of 85.48. If the kiwi extends its uptrend, it is likely to find resistance around the 88.00 region.

The kiwi edged up to 0.5980 against the U.S. dollar, from a recent 5-day low of 0.5924. On the upside, 0.61 are seen as the next resistance level for the kiwi.

Looking ahead, the Federal Labor Agency is scheduled to release Germany's unemployment for May at 3:55 am ET in the European session. The jobless rate is seen unchanged at 6.3 percent.

In the New York session, U.S. MBA mortgage approvals data, U.S. Richmond Fed manufacturing index for May and U.S. Dallas Fed services index for May are slated for release.

At 2:00 pm ET, the Minutes of the Federal Open Market Committee (FOMC) is set to be published.