Title: Dollar Down, RBNZ Hands Down Biggest Rate Hike in 22 Years
Apr 12, 2022 11:51PM ET
The dollar weakened in Asia Wednesday morning, while the euro remained at a five-week low as the war in Ukraine shows no signs of ending soon. Investors also digested the Reserve Bank of New Zealand's (RBNZ) largest interest rate hike in 22 years.
The U.S. dollar index, which tracks the greenback against a basket of other currencies, was down 0.04% at 100.250 at 11:39 PM ET.
The USD/JPY pair rose 0.16% to 125.56.
The pair AUD/USD increased 0.04% to 0.7462, while the pair NZD/USD decreased 0.03% to 0.6847.
The USD/CNY pair decreased 0.01% to 6.3653 as China was set to release its latest trade data later in the day.
The GBP/USD pair rose slightly by 0.09% to 1.30009.
The RBNZ raised its rate to 1.5% as it announced its policy decision earlier in the day, adding that "the committee agreed that the "path of least regret" is to raise the OCR now rather than later to counter rising inflation expectations. It is appropriate to continue to tighten monetary conditions.
Some investors had also expected the central bank to continue the tightening trend.
The Bank of Canada will make its own monetary policy decision later today, and the European Central Bank and Bank of Korea will follow on Thursday.
The U.S. dollar also cooled its recent rally as investors digested Tuesday's inflation data from the U.S. and hoped that price pressures had peaked.
According to the data, the consumer price index (CPI) rose 8.5% year-on-year in March, reaching its highest level since late 1981, and increased 1.2% month-on-month, while the core inflation index rose 6.5% year-on-year and 0.3% month-on-month.