The New Zealand Dollar (NZD) edged higher against its U.S. counterpart during Wednesday’s Asian trading session, pushing the NZD/USD pair to around 0.5965. The modest gain followed the Reserve Bank of New Zealand’s (RBNZ) widely expected decision to cut interest rates, with investor focus now shifting to the upcoming release of the Federal Open Market Committee (FOMC) minutes later in the day.
On Tuesday, the RBNZ lowered its Official Cash Rate (OCR) by 25 basis points to 3.25% from 3.5%, marking its sixth straight policy meeting with a rate reduction. While the Kiwi initially slipped, it quickly trimmed losses in response to the announcement.
According to the RBNZ’s meeting minutes, inflation has returned to within the central bank’s target range. The committee stated it remains well-positioned to respond to both domestic and global developments to ensure medium-term price stability. The bank’s updated projections see the OCR at 3.12% by September 2025 and falling further to 2.87% by June 2026, reinforcing expectations of further rate cuts ahead.
Despite NZD strength post-RBNZ, gains in the NZD/USD pair may be limited by improving U.S. economic data. On Tuesday, the Conference Board reported that U.S. Consumer Confidence rose sharply to 98.0 in May, up from a revised 86.0 in April. Meanwhile, U.S. Durable Goods Orders dropped by 6.3% in April, a better-than-expected result compared to the forecasted 7.9% decline, despite a sharp drop from the revised 7.6% increase in March.
As markets digest these mixed signals, traders now turn their attention to the FOMC meeting minutes, which could offer further clues on the U.S. Federal Reserve’s monetary policy outlook and influence the next move for the NZD/USD pair.
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