NZDUSD Hits 3-Week High – RBNZ Holds Rate

NZDUSD Analysis — The New Zealand dollar climbed above $0.602, reaching its highest level in almost three weeks. The Reserve Bank of New Zealand kept the cash rate unchanged at 5.5%, which aligns with expectations. The central bank has extended the rate pause for the sixth consecutive meeting as policymakers seek to reduce capacity pressures and inflation further.

NZDUSD Hits 3-Week High

The RBNZ also aims to bring inflation back down within the target range of 1% to 3% by the end of the year. However, the central bank acknowledged that economic growth in New Zealand remains weak after the country entered into a technical recession in the fourth quarter.

Policymakers also noted a sharp decline in business confidence and a weakening in firms’ expectations for their activity and investment. From a global perspective, investors are gearing up for a key US inflation reading that could further guide the monetary policy outlook.