Kiwi climbs anew despite RBNZ rate cut
The New Zealand dollar rose in Asian trade on Wednesday against a basket of major rivals, resuming gains against the US dollar and approaching a two-month high despite the RBNZ’s policy decision today.
As expected, the Reserve Bank of New Zealand voted to cut interest rates by 50 basis points today to 3.75%, the fourth such rate cut in a row, and hinted at additional rate cuts this year.
RBNZ Governor Adrian Orr said that inflation forecasts give the central bank confidence to enact more cuts, opening the door for 0.25% rate cuts at both the April and May meetings.
The Price
The NZD/USD pair fell 0.35% today to 0.5724, with a session-low at 0.5678.
The pair closed down 0.55% on Tuesday, marking the first loss in four days on profit-taking away from a two-month high at 57.40.
RBNZ
The Reserve Bank of New Zealand voted to cut interest rates by 50 basis points today to 3.75%, the lowest since October 2022, and the fourth such rate cut in a row.
The RBNZ expressed confidence about the path of inflation this year, hinting at additional rate cuts in 2025.
However, it expressed concerns about the developing global trade war led by US President Donald Trump and its potential impact on economic performance.
Adrian Orr
RBNZ Governor Adrian Orr said he expects 50 basis points of rate cuts by mid July, thus estimating two 0.25% rate cuts at the April and May meetings.
Following the remarks, the odds of a 0.25% RBNZ rate cut in April surged to 93%, with interest rate futures expecting New Zealand rates to hit 3% by the end of the year.
Gold rises nearly 2% to fresh record highs
Gold prices rose on Tuesday to fresh record highs, shrugging off the dollar's advance against most major rivals.
Tomorrow, the Federal Reserve will release its meeting minutes, expected to provide clues on the path ahead for monetary policies.
President Trump recently announced plans to increase tariffs on countries that impose tariffs on US imports in order to squash trade imbalances with global trade partners.
Trump threatened tariffs of upwards to 100% on BRICS countries, including Brazil, China, and India.
Goldman Sachs raised its price forecasts for gold to $3100 by the end of 2025 from $2890 in previous forecasts, citing geopolitical uncertainties, the trade war, and demand from global central banks.
Otherwise, the dollar index rose 0.5% as of 20:30 GMT to 107.1, with a session-high at 107.1, and a low at 106.8.
On trading, gold spot prices rallied 1.8% as of 20:30 GMT to $2953.2 an ounce.
US stock indices mixed as the week opens up
US stock indices were mixed on Tuesday as investors continue to monitor the latest policies and announcements by President Donald Trump.
Tomorrow, the Federal Reserve will release its meeting minutes, expected to provide clues on the path ahead for monetary policies.
President Trump recently announced plans to increase tariffs on countries that impose tariffs on US imports in order to squash trade imbalances with global trade partners.
Trump threatened tariffs of upwards to 100% on BRICS countries, including Brazil, China, and India.
White House officials said the tariffs won’t get into immediate effect, and would give countries the chance to negotiate new conditions.
Trump also revealed plans to impose tariffs on automobile imports, threatening the automotive industry in Germany, Japan, and South Korea.
On trading, Dow Jones fell 0.2% as of 19:05 GMT to 44463 points, while S&P 500 rose 0.1%, or 3 points to 6118 points, while NASDAQ gave up 0.1%, or 18 points to 20008 points.