NZD/USD surges above 0.5950 after RBNZ’s policy decision, FOMC Minutes awaited

• NZD/USD appreciates as the RBNZ lowered its Official Cash Rate by 25 basis points, as expected.

• RBNZ’s Hawkesby noted that inflation is in the target range and deciding to hold a vote on rates was a healthy sign.

• The US Dollar gains ground ahead of the May 7 FOMC Meeting Minutes release on Wednesday.

NZD/USD recovers its recent losses from the previous session, trading around 0.5970 during the Asian hours on Wednesday. The pair appreciates as the New Zealand Dollar (NZD) gains ground following the Reserve Bank of New Zealand's (RBNZ) interest rate decision.

The RBNZ lowered its Official Cash Rate (OCR) by 25 basis points (bps) to 3.25% from 3.5% in the May policy meeting. The Minutes of the RBNZ interest rate meeting suggested that inflation is within the target band. The central bank projected the OCR to be at 3.12% in September 2025 and at 2.87% in June 2026, increasing the likelihood of more rate cuts.

The Reserve Bank of New Zealand’s (RBNZ) acting Governor Christian Hawkesby responded to media questions at the post-meeting press conference. Hawkesby said that inflation is in the target range and described the decision to hold a vote on rates as a healthy sign. He acknowledged that interest rates are lowered to a considerable extent to bring them into a neutral zone.

However, the upside of the NZD/USD could be restrained as the US Dollar Index (DXY), which measures the value of the Greenback against six major currencies, is extending its gains for the second successive day. The DXY is trading around 99.80 at the time of writing. Traders likely await the FOMC Minutes, which are due later on Wednesday.

The US Dollar is continuing to gain support following the Conference Board's Consumer Confidence Index rising to 98.0 in May from the previous 86.0 reading. Additionally, the emergence of bond market optimism is supporting the Greenback, driven by Japan’s plans for potential cuts in government debt issuance.