TOKYO- The US dollar steadied on Wednesday as investors eyed tariff threats and tense Russia-Ukraine negotiations, while the New Zealand dollar clawed back losses after the central bank indicated its aggressive rate cuts were set to slow.
The Reserve Bank of New Zealand reduced its benchmark rate by 50 basis points to 3.75 percent on Wednesday as widely expected. The latest cutbrings the cumulative easing to 175 basis points since August as the RBNZ aims to support a sluggish economy.
But while the central bank signaled that more rate reductions are to come, it also suggested that further moves would be smaller with the end of the easing cycle coming closer into view.
The kiwi was last up 0.28 percent at $0.572.
Economists at Westpac are calling for quarter basis point reductions at the RBNZ’s meeting in April and May.
“We think the RBNZ will pause at this point as by then there will be tangible signs of a return to trend growth, while inflation will still be in the top half of the 1-3 percent target range,” they wrote in a research note.
In the broader market, currencies were largely steady as investors sized up the latest note in US President Donald Trump’s tariff crescendo and uncertainty after initial Russia-Ukraine peace talks finished without Kyiv or Europe at the table.
Ukraine President Volodymyr Zelenskiy said no peace deal could be made behind his back. He postponed his visit to Saudi Arabia planned for Wednesday until March 10 to avoid giving “legitimacy” to the US Russia talks.
Russia hardened its demands, notably insisting it would not tolerate the NATO alliance granting membership to Kyiv.
