Ella 
NZD/USD extended its rebound during early Asian trading on Thursday, trading near 0.5935. The New Zealand dollar (NZD) was slightly higher against the U.S. dollar (USD) following higher inflation data. U.S. building permits, housing starts, the Philadelphia Fed manufacturing index and weekly jobless claims are all due later on Thursday.
Data released by Statistics New Zealand on Thursday showed that the country’s consumer price index (CPI) rose 2.5% year-on-year in the first quarter of 2025, compared with a 2.2% increase recorded in the fourth quarter of 2024. This figure was higher than the expected 2.3%. Meanwhile, quarterly CPI inflation rose to 0.9% in the first quarter from 0.5% previously, above the market consensus of 0.7%.
The inflation data was slightly higher than the Reserve Bank of New Zealand’s (RBNZ) February forecast, but analysts do not believe the increase will prevent further cuts to the Official Cash Rate (OCR) in the coming months.
On the dollar front, the U.S. Census Bureau revealed on Wednesday that consumer spending was stronger than expected in March. U.S. retail sales rose 1.4% in March after increasing 0.2% in February. This figure was better than the expected 1.3%. The market reaction to this release was muted.
Traders continued to bet that the Federal Reserve will cut interest rates this year after Federal Reserve Chairman Jerome Powell said the central bank was well positioned to await greater clarity before making any changes to its policy stance. Financial markets expect the Fed to resume cutting interest rates in June, with the current policy rate of 4.25%-4.50% set to be lower by one percentage point by the end of the year.
You Might Be Interested In:
- 3 Things Everyone Gets Wrong About the U.S. Dollar
- 8 Countries Where the American Dollar Is Strong
- Who Benefits from a Weak Dollar?
