Ella 
In early Asian trading on Wednesday, the New Zealand dollar/US dollar rebounded to 0.5905, rebounding from the year’s low of 0.5860. Expectations that the Reserve Bank of New Zealand is unlikely to cut the Official Cash Rate (OCR) anytime soon boosted NZD/USD.
New Zealand’s annual rate of inflation continues to fall, according to figures released today by Statistics New Zealand (Stats NZ). In the first quarter of 2024, the consumer price index increased at an annual rate of 4.0%. Nicola Groden, senior manager of consumer prices at Statistics New Zealand, said price increases this quarter were the smallest since June 2021. But it is still above the RBNZ’s target range of 1% to 3%.
Inflationary pressures eased further in New Zealand in March, although domestic prices remained uncomfortably stagnant, making it unlikely that the Reserve Bank of New Zealand would cut interest rates anytime soon. This in turn provides some support for NZD/USD.
On the U.S. dollar, hawkish comments from Federal Reserve Chairman Powell may boost the U.S. dollar in the short term. Federal Reserve Chairman Jerome Powell said the U.S. economy has yet to see inflation return to the central bank’s target, suggesting a rate cut is unlikely in the near future. Investors see a near 67% chance of the Fed cutting interest rates in September, according to the CME Group’s FedWatch tool.
