Ella 
The NZD/USD fluctuated after the Reserve Bank of New Zealand announced its interest rate decision. The Reserve Bank of New Zealand kept the official cash rate (OCR) at 5.5% for the sixth consecutive meeting, as expected. NZD/USD held steady around 0.6060 in Asia on Wednesday.
Policymakers stressed the importance of keeping interest rates capped to curb inflation. In addition, given that New Zealand’s economy has entered recession and consumer confidence has dropped sharply, some economists believe that the Reserve Bank of New Zealand’s decision is dovish. The market believes that the Reserve Bank of New Zealand may start cutting interest rates in August.
The U.S. Dollar Index (DXY) is trying to hold its ground ahead of the release of U.S. Consumer Price Index (CPI) data and U.S. Federal Open Market Committee (FOMC) meeting minutes.
However, the U.S. dollar (USD) is facing difficulties as U.S. Treasury yields fall. As of press time, the U.S. dollar index was consolidating near 104.10, with the two-year U.S. Treasury yields and the 10-year U.S. Treasury yields at 4.74% and 4.35% respectively.
Headline U.S. consumer prices are expected to accelerate in March while core inflation eases. The dollar is on the sidelines, awaiting possible policy shifts following the inflation announcement. If inflation exceeds expectations, coupled with strong labor market data last week, it may prompt the Fed to adopt a more hawkish stance.
