- NZD/USD weakens as RBNZ keeps Official Cash Rate (OCR) unchanged at 5.50% at its July meeting.
- The New Zealand Dollar struggles after the release of soft Consumer Price Index data from its close trading partner, China.
- The US dollar appreciated after Fed’s Powell stated that a rate cut is not appropriate until there is greater confidence that inflation is slowing.
NZD/USD is losing ground, trading around 0.6100 during Asian trading hours on Wednesday. This drop is driven by an interest rate decision from the Reserve Bank of New Zealand (RBNZ). The RBNZ has chosen to keep the Official Cash Rate (OCR) unchanged at 5.50% at its July monetary policy meeting, marking the eighth consecutive unchanged meeting.
The New Zealand Dollar (NZD) is facing pressure following the release of soft Consumer Price Index (CPI) data from China, a key trading partner. The Chinese CPI rose 0.2% year-on-year in June, compared with a 0.3% increase in May. Market expectations had projected a 0.4% increase for the period. Chinese CPI inflation fell 0.2% month-on-month in June, compared with a 0.1% decline in May, which was below the anticipated 0.1% decline.
The US Dollar (USD) received support following Federal Reserve (Fed) Chairman Jerome Powell’s testimony before the US Congress on Tuesday. Despite acknowledging improving inflation figures, the Fed remains firmly cautious. Powell answered questions before the Senate Banking Committee on the first day of his testimony before Congress on Tuesday.
Fed Chair Jerome Powell stated, “More good data would strengthen our confidence in inflation.” Powell emphasized that a “policy rate cut is not appropriate until the Fed gains greater confidence that inflation is sustainably headed toward 2%.” He also noted that “first quarter data did not support the increased confidence in the path of inflation that the Fed needs to cut rates.”
Traders are looking ahead to Fed Chair Jerome Powell’s second semi-annual testimony, as well as speeches by Fed Chair Michelle Bowman and Austan Goolsbee. In addition, attention will be on US Consumer Price Index (CPI) data, due out on Thursday.
Economic indicator
Interest rate decision
RBNZ Interest Rate Decision is announced by the Reserve Bank of New Zealand.This rate affects a range of interest rates set by commercial banks, building societies and other institutions towards their own savers and borrowers. It also tends to affect the price of financial assets such as bonds, shares and exchange rates, which affect consumer and business demand in a variety of ways.
Latest Post:
Wed Jul 10, 2024 02:00
Frequency:
Irregular
Current:
5.5%
Dear:
5.5%
Previous:
5.5%
Fountain:
Reserve Bank of New Zealand
The Reserve Bank of New Zealand (RBNZ) holds monetary policy meetings seven times a year, announcing its interest rate decision and the economic assessments that influenced its decision. The central bank provides clues about the economic outlook and future policy path, which are of great relevance to the valuation of the NZD. Positive economic developments and optimistic outlooks could lead the RBNZ to tighten policy by raising interest rates, which tend to be bullish on the NZD. Policy announcements are usually followed by Governor Adrian Orr’s press conference.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
