NZ Dollar Falls As Asian Stock Markets Traded Lower

(RTTNews) - The New Zealand dollar weakened against other major currencies in the Asian session on Wednesday amid increased risk aversion by the inversion, as surging crude oil prices led to a sustained acceleration in the pace of inflation and continued to drive global bond yields higher, increasing the possibility of an interest rate hike in the coming months to combat inflation.

CME Group's FedWatch Tool is currently indicating a 41.9 percent chance rates will be a quarter point higher following the U.S. Fed's last monetary policy meeting of the year.

While concerns of renewed escalation in the Middle East war increased, Iran's Tasnim news agency reported that Iran had offered a 14-point resolution draft proposal aimed at ending the war and building trust. The U.S. administration has delayed responding to proposal submitted by Iran while uncertainty surrounding the reopening of the Strait of Hormuz continues to linger.

In economic news, China maintained its loan prime rates unchanged for the twelfth straight month, as widely expected.

The People's Bank of China maintained its one-year loan prime rate at 3.0 percent. Similarly, the five-year LPR, the benchmark for mortgage rates, was retained at 3.50 percent.

Previously, the bank had reduced its both LPRs by quarter points in October 2024 and 10 basis points each in May 2025.

Traders examined the People's Bank of China's (PBOC) decision to maintain its benchmark lending rates, seeking hints about the economic prospects of New Zealand's largest trading partner.

In the Asian trading now, the NZ dollar fell to more than a 1-month low of 0.5815 against the U.S. dollar and a 2-week low of 92.50 against the yen, from yesterday's closing quotes of 0.5833 and 92.77, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.57 against the greenback and 91.00 against the yen.

Against the euro and the Australian dollar, the kiwi edged down to 1.9938 and 1.2197 from Tuesday's closing quotes of 1.9900 and 1.2180, respectively. The kiwi may test support near 2.00 against the euro and 1.23 against the aussie.

Looking ahead, Eurozone CPI data for April is due to be released at 5:00 am ET in the European session.

In the New York session, U.S. MBA weekly mortgage approvals data and U.S. EIA crude oil data are slated for release.