NZD/USD Stable while the RBNZ keeps the fees, Trump expands the tariff campaign

• The NZD/USD is quoted just below 0.6000 during the American trading session after bouncing from a minimum of two weeks.
• The RBNZ maintained a moderate bias, pointing out that greater relief is likely if inflation continues to decrease.
• The minutes of the June meeting of the FED showed that most officials expect rates cuts later this year, which weighs slightly on the USD.

The New Zealand dollar (NZD) is flattened against the US dollar (USD) on Wednesday, with the US dollar reducing their daily profits after the publication of the minutes of the June meeting of the Federal Reserve (Fed). Earlier in the day, the NZD found some support after the New Zealand Reserve Bank (RBNZ) maintained its official cash (OCR) rate at 3.25%, as expected widely, after six consecutive rate cuts since August 2024.

The NZD/USD is bouncing from a minimum of two weeks after the RBNZ policy decision. At the time of writing, the PAR is quoted around 0.5999, little changed during American trading hours, while market participants digest the stable position of the Central Bank. Attention is also returning to the growing global commercial uncertainties, with investors waiting for new developments in rates that could influence currency flows and the feeling of risk.

The minutes of the June meeting of the Federal Open Market Committee (FOMC) revealed that most officials expect interest rate cuts to be appropriate later this year, citing the decrease in inflationary pressures and the possible economic weakness and the labor market. While some members supported a possible cuts as soon as at the next meeting, others did not see the need for policy changes in 2025. Policies responsible generally considered that inflation related to rates is likely to be temporary or limited and pointed out that inflation expectations remain well anchored. The minutes also pointed to high uncertainty linked to commercial policy and geopolitical developments, although the general risks had decreased slightly since the previous meeting.

The president of the United States, Donald Trump, intensified his tariff campaign on Wednesday by publishing new letters on his social media platform, Truth Social, aimed at six additional countries – argelia, Iraq, Libya, Brunéi, Moldova and Philippines – with new import tariffs ranging between 20% and 30%. The new tariffs, which will enter into force on August 1, are produced only two days after Trump issued notions similar to 14 other nations. This last movement underlines Trump’s aggressive impulse so he calls “reciprocal tariffs”, destined to correct what he describes as unfair commercial practices. The rapid expansion of tariff threats keeps global tension markets, with investors closely observing how the affected countries respond and if commercial agreements materialize before the deadline of August.

The RBNZ adopted a cautious tone in its last statement, noting that, although the members considered a cut of 25 basic points, they finally agreed to maintain the OCR without changes due to the persistent inflationary risks. The Central Bank reiterated its expectation of reducing OCR even more in the coming months, assuming that medium -term inflationary pressures continue to decrease. The markets now expect the next cut in August, with a possible change to 2.75% for the beginning of 2026. Those responsible for policies also indicated the global commercial uncertainty and the weak internal impulse as a key harsh risks, maintaining the door open to greater relief.