NZD/USD rises toward 0.6150 after the RBNZ decides to keep OCR unchanged

The NZD/USD pair rebounded after two days of losses, trading around 0.6140 during Asian hours on Wednesday following the Reserve Bank of New Zealand's (RBNZ) interest rate decision. The central bank maintained its Official Cash Rate (OCR) at 5.5% for the seventh consecutive meeting as inflation remains elevated, remaining above the 1-3% target band.

In the first quarter, New Zealand's annual Consumer Price Index (CPI) eased to 4.0%, compared to the previous reading of 4.7%. This has marked the lowest figure since the second quarter of 2021. This decline has fueled speculation that the RBNZ might consider rate cuts later in 2024.

In the United States (US), traders await the Minutes of the Federal Open Market Committee (FOMC) meeting held on May 1, seeking clues for the Federal Reserve’s (Fed) policy stance. The central bank maintains a cautious stance regarding inflation and the possibility of rate cuts in 2024.

On Tuesday, Federal Reserve Bank of Boston President Susan Collins spoke at the event of "Central Banking in the Post-Pandemic Financial System". Collins stated that progress toward interest rate adjustment will take longer and emphasized that patience is the right policy for the Fed.

Financial markets anticipate the first interest rate cut will occur in September at the earliest, with two reductions of a quarter percentage point each expected before the end of the year. According to the CME FedWatch Tool, the probability of the Federal Reserve implementing a 25 basis-point rate cut in September has seen a slight uptick to 50.3%, compared to 49.6% a day ago.