- NZD/USD trades in positive territory near 0.6000 in Wednesday’s Asian session, adding 0.25% on the day.
- The RBNZ held its OCR steady at 3.25% at its July meeting.
- The release of the FOMC Minutes will be the highlight later on Wednesday.
The NZD/USD pair gains ground to around 0.6000 during the Asian trading hours on Wednesday. The New Zealand Dollar (NZD) strengthens against the Greenback after the Reserve Bank of New Zealand (RBNZ) interest rate decision. The attention will shift to the release of the FOMC Minutes later on Wednesday.
As widely expected, the RBNZ decided to leave the Official Cash Rate (OCR) unchanged at 3.25% after concluding the June policy meeting on Wednesday. The New Zealand central bank stood pat on the policy rate after six consecutive cuts. The Kiwi attracts some buyers in an immediate reaction to the RBNZ interest rate decision.
According to the minutes of the RBNZ interest rate meeting, the case for keeping the interest rate on hold at the July meeting highlighted the elevated level of uncertainty and the benefits of waiting until August in light of near-term inflation risks. The committee further stated that risks to the global outlook remain elevated.
Data released by the National Bureau of Statistics of China on Wednesday showed that the country’s Consumer Price Index (CPI) rose at an annual pace of 0.1% in June, compared to a decline of 0.1% in May. The market consensus was for 0% in the reported period.
Meanwhile, the Producer Price Index (PPI) fell 3.6% YoY in June, following a 3.3% decline in May. The data came in below the market consensus of 3.2%. The concerns about persistent deflationary pressure in China driven by sluggish domestic demand and tariff threats could weigh on the China-proxy Kiwi as
The FOMC Minutes will take center stage on Wednesday, as they might offer some hints about how Fed officials view the US economy and give insight into the interest rate path. Several Fed policymakers are also set to speak later this week. Any dovish remarks from Fed officials could undermine the Greenback and create a tailwind for the pair in the near term.
