NZ Dollar Falls After RBNZ Rate Decision

(RTTNews) - The New Zealand dollar retreated from recent highs against other major currencies in the Asian session on Wednesday, after the Reserve Bank of New Zealand's (RBNZ) widely anticipated decision to maintain rates constant.

The Reserve Bank of New Zealand left its benchmark interest rate unchanged, citing elevated level of uncertainty and near-term risks to inflation.

The Monetary Policy Committee, governed by Christian Hawkesby, decided to hold the Official Cash Rate at 3.25 percent.

The bank has paused the easing cycle for the first time since it started cutting rates in August 2024. The current borrowing cost is the lowest level since August 2022.

Traders are reluctant to make significant moves amid the lingering uncertainty about U.S. trade policy after U.S. President Donald Trump delayed the reciprocal tariff deadline until August 1.

Trump also announced a 50 percent tariff on copper imports, hinted at a potential 200 percent tariff on pharmaceuticals, and an additional 10 percent tariff on BRICS nations and their allies, marking a new phase in his aggressive trade policy.

Traders also look ahead to the release of the minutes of the US Fed's latest monetary policy meeting due today. It may shed light on the outlook for interest rates ahead of the central bank's next meeting on July 29-30. CME Group's FedWatch Tool is currently indicating a 95.3 percent chance the Fed will leave rates unchanged this month.

In the Asian trading today, the New Zealand dollar fell to a 2-day low of 1.9895 against the euro, from a recent high of 1.9491. The kiwi may test support near the 2.01 region.

Against the U.S. and the Australian dollars, the kiwi advanced to more than a 2-week low of 0.5976 and nearly a 2-month low of 1.0902 from recent highs of 0.6015 and 1.0868, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.58 against the greenback and 1.10 against the aussie.

The kiwi edged down to 87.93 against the yen, from a recent near 6-month high of 88.34. On the downside, 85.00 is seen as the next support level for the kiwi.

Looking ahead, U.S. MBA mortgage approvals data, U.S. wholesale inventories for May, U.S. EIA crude oil data and U.S. FOMC minutes are due to be release in the New York session.