NZ Dollar Falls As RBNZ Leaves Key Rate Unchanged

(RTTNews) - The New Zealand dollar weakened against other major currencies in the Asian session on Wednesday after New Zealand's central bank decided to hold its benchmark rate unchanged, as widely expected.

The Monetary Policy Committee of the Reserve Bank of New Zealand maintained the Official Cash Rate at 5.50 percent.

The committee decided to keep the interest rate at a restrictive level to ensure that inflation returns to the 1 to 3 percent target range and to support maximum sustainable employment.

Policymakers observed that there is a near-term risk of activity and inflation not slowing as much as needed. Further, a greater slowdown in global economic demand, particularly in China could damp commodity prices and in turn export revenue.

The latest policy decision signaled among the traders that the RBNZ is likely to end its rate-hiking cycle.

The Asian shares also traded lower, after better-than-expected U.S. jobs data, strong U.S. dollar and spiking treasury yields at its highest level in 16 years continued to raise concerns the U.S. Fed will hold interest rates higher for longer than previously anticipated to tame the stubborn inflation.

In the Asian trading now, the NZ dollar fell to nearly a 4-week low of 0.5871 against the U.S. dollar and a 1-week low of 1.7823 against the euro, from yesterday's closing quotes of 0.5906 and 1.7701, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.57 against the greenback and 1.82 against the euro.

Against the yen and the Australian dollar, the kiwi edged down to 87.59 and 1.0719 from yesterday's closing quotes of 88.01 and 1.0658, respectively. On the downside, 86.00 against the yen and 1.08 against the aussie are seen as the next support levels for the kiwi.

Looking ahead, PMI reports from various European economies and U.K. for September, Eurozone retail sales and PPI data for August, are slated for release in the European session.

At 4:15 am ET, ECB President Christine Lagarde will deiver a welcome address via video at 2023 ECB Conference on Monetary Policy: bridging science and practice in Frankfurt, Germany.

At 7:40 am ET, ECB Vice President Luis de Guindos will participate in 1st Annual Conference organised by Central Bank of Cyprus, in Limassol, Cyprus.

In the New York session, U.S. MBA mortgage approvals data, U.S. ADP employment data, U.S. S&P Global and ISM PMI data for September, U.S. factory orders for August and U.S. EIA crude oil data are set to be published.

At 10:00 am ET, ECB board member Fabio Panetta will deliver a speech at 2023 ECB Conference on Monetary Policy: bridging science and practice in Frankfurt, Germany.

At 11:25 am ET, Federal Reserve Bank of Kansas City President Jeffrey Schmid and Federal Reserve Board Governor Michelle Bowman will deliver speeches before the 2023 Community Banking Conference hosted by the Federal Reserve Bank of St. Louis.

At 12:00 pm ET, ECB President Christine Lagarde will deliver a inauguration speech for Minouche Shafik as President of Columbia University in New York, USA.