The Reserve Bank of New Zealand cut its Official Cash Rate by 0.50 to 4.75%, weakening the New Zealand Dollar.
- The Reserve Bank of New Zealand cut its Official Cash Rate by 50 basis points to a new rate of 4.75%, as was widely expected. However, the Bank gave a more dovish statement, saying that inflation has reached the Bank’s target range, clearly indicating a less restrained monetary policy. This dovish tilt pushed the Kiwi lower during the past few hours.
- Sentiment continues to be hawkish on the US Dollar after the trigger event last Friday, when considerably stronger than expected US jobs and average earnings data was released. A solid majority of analysts now expects only a further 0.50% of cuts before the start of 2025 (by 78% of market participants). Both the 2-Year and the 10-Year Treasury Yields are trading or have recently traded above 4%. The US Dollar has risen today to test a key resistance level at 102.25.
- Since today’s Tokyo open, the strongest major currency has the Australian and US Dollars, while the weakest has been the New Zealand Dollar, putting the NZD/USD currency pair in focus.
- Gold and the S&P 500 Index remain relatively near their recent record highs, despite the US Dollar upturn.
- There will be a release of the minutes of the most recent FOMC meeting in the USA later today.
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