Forex News: NZ Dollar Rises After RBNZ Rate Hike Decision

NZ Dollar Rises After RBNZ Rate Hike Decision

(RTTNews) - The New Zealand dollar strengthened against other major currencies in the Asian session on Wednesday, following the Reserve Bank of New Zealand or the RBNZ's quarter-basis-point interest rate increase.

At its June policy meeting, the RBNZ increased its Official Cash Rate (OCR) by 25 basis points to 2.50%, in line with broad market forecasts. The central bank's Monetary Policy Review states that when economic activity improves, additional monetary stimulus cuts will probably be required to bring inflation down to its target midpoint of 2%.

Future OCR adjustments, according to the RBNZ, will continue to be solely data-dependent and will be influenced by medium-term inflationary pressures, price-setting behavior, and incoming economic indicators.

Notably, RBNZ Governor Anna Breman made the case during the policy meeting that businesses could be less able to pass on rising prices to customers if demand is still sluggish throughout the economy.

Crude oil prices spiked as concerns of fresh U.S.-Iran conflicts surfaced after attacks on at least three tankers in the Strait of Hormuz. West Texas Intermediate crude for August delivery was up $2.01 or 2.93 percent at $70.56 per barrel.

In the Asian trading today, the NZ dollar rose to more than 2-week highs of 1.9987 against the euro and 92.72 against the yen, from yesterday's closing quotes of 2.0091 and 92.13, respectively. If the kiwi extends its uptrend, it is likely to find support around 1.90 against the euro and 94.00 against the yen.

Against the U.S. and the Australian dollars, the kiwi advanced to 2-day highs of 0.5711 and 1.2150 from Tuesday's closing quotes of 0.5676 and 1.2196, respectively. The kiwi may test resistance around 0.59 against the greenback and 1.20 against the aussie.

Looking ahead, U.S. MBA weekly mortgage approvals data, U.S. used car prices data for June, and U.S. EIA weekly crude oil data are slated for release in the New York session.

At 2:00 pm ET, the minutes from the Federal Reserve's latest FOMC meeting is due to be released.

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