Forex News: NZ Dollar Falls As RBNZ Leaves Rates Unchanged

NZ Dollar Falls As RBNZ Leaves Rates Unchanged

(RTTNews) - The New Zealand dollar weakened against other major currencies in the Asian session on Wednesday, after the Reserve Bank of New Zealand left its benchmark interest rate unchanged, signaling an intention to maintain an accommodative policy stance to support economic recovery.

At the first meeting of Anna Breman as RBNZ Governor, the Monetary Policy Committee decided to hold the key official cash rate at 2.25 percent, as widely expected.

The bank has lowered its benchmark rate by 325 basis points since August 2024, bringing it to the lowest since mid-2022.

If the economy evolves as expected, monetary policy is likely to remain accommodative for some time, the bank said. The MPC concluded that the monetary policy settings will gradually normalize as the recovery strengthens and inflation falls sustainably towards the target.

Crude oil prices traded lower amid reports indicating that the Organization of Petroleum Exporting Countries is leaning towards resuming oil output increases from April. West Texas Intermediate crude for March delivery slid $0.44 or 0.7 percent to $62.45 a barrel.

The data from the American Petroleum Institute (API) is expected to be released later on Wednesday, and traders are anticipating its release.

The progress of the US-Iran negotiations will be watched by traders.

Meanwhile, Asian stock markets traded higher amid thin trading volumes as most of the regional markets, including mainland China, Hong Kong, Singapore, Malaysia, Taiwan and South Korea, remain shuttered for the Lunar New Year holidays. Traders also monitored the latest developments on the geopolitical front.

Traders were also reluctant to make significant moves ahead of key economic data in the coming days. The minutes of the U.S. Fed's latest monetary policy meeting later in the day may also shed additional light on the outlook for interest rates.

In the Asian trading today, the NZ dollar fell to a 9-day low of 1.9751 against the euro and a 2-day low of 92.05 against the yen, from yesterday's closing quotes of 1.9602 and 92.71, respectively. If the kiwi extends its downtrend, it is likely to find support around 2.01 against the euro and 90.00 against the yen.

Against the U.S. and the Australian dollars, the kiwi dropped to nearly a 2-week low of 0.5996 and a 6-day low of 1.1786 from Tuesday's closing quotes of 0.6048 and 1.1716, respectively. The next possible may test support near 0.58 against the greenback and 1.18 against the aussie.

Looking ahead, U.S. MBA mortgage approvals data, U.S. building permits for November, durable goods orders for December, housing starts for November, industrial and manufacturing productions for January are slated for release in the New York session.

At 2:00 pm ET, minutes of the U.S. Fed's latest monetary policy is set to be published.

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