The NZD/USD pair rose to 0.6090 in the early Asian session on Thursday. The Reserve Bank of New Zealand (RBNZ) decided to keep its policy rate unchanged at 5.5% in July and adopted a less hawkish stance. Federal Reserve (Fed) Chair Jerome Powell stated that interest rate decisions would be data-driven and not influenced by political factors.
The NZD/USD pair is trading stronger around 0.6090 in the early Asian session due to a weaker US Dollar (USD). The RBNZ maintained its Official Cash Rate (OCR) at 5.5% and expressed concerns about persistent inflation in the near term. Powell emphasized the Fed’s reliance on data for interest rate decisions, with a focus on achieving sustainable inflation towards the 2% target.
Investors are awaiting the US Consumer Price Index (CPI) data release for June, which could impact the market. The softer CPI reading might lead to expectations of Fed rate cuts, potentially weakening the USD against the NZD. The performance of the Chinese economy and dairy prices also play a role in influencing the movement of the New Zealand Dollar (NZD).
Overall, economic data releases, central bank policies, and market sentiment are key factors driving the valuation of the NZD. The currency tends to strengthen during risk-on periods and weaken during market turbulence or economic uncertainty.