NZD/USD strengthens to near 0.5965 in Wednesday’s Asian session, up 0.20% on the day.
The RBNZ slashed its OCR by 25 bps to 3.25% from 3.5% at its May meeting.
US CB’s Consumer Confidence Index rose to 98.0 in May vs. 86.0 prior.
The NZD/USD pair gains ground to around 0.5965 during the Asian trading hours on Wednesday. The New Zealand Dollar (NZD) edges higher against the US dollar (USD) after the Reserve Bank of New Zealand (RBNZ) interest rate decision. Traders will shift their attention to the Minutes of the Federal Open Market Committee (FOMC), which is due later on Wednesday.
As widely expected, the RBNZ decided to lower the Official Cash Rate (OCR) by 25 basis points (bps) to 3.25% from 3.5% after concluding the May policy meeting on Tuesday. This marks the sixth consecutive meeting for rate cuts. The Kiwi trims losses in an immediate reaction to the RBNZ interest rate decision.
According to the Minutes of the RBNZ interest rate meeting, inflation is within the target band, and the committee is well-placed to respond to both domestic and international developments to maintain price stability over the medium term. The New Zealand central bank projected the OCR to be at 3.12% in September 2025 and at 2.87% in June 2026, lifting bets for more rate reductions.
On the other hand, the upbeat US economic data on Tuesday might lift the USD and cap the upside for the pair. The US Consumer Confidence Index rose to 98.0 in May from 86.0 (revised from 85.7), the Conference Board revealed on Tuesday. Additionally, US Durable Goods Orders declined by 6.3% in April, compared to a 7.6% increase in March (revised from 9.2%). This figure came in stronger than the -7.9% expected.
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