Investing.com - The New Zealand dollar gained more than 1% on Wednesday in Asia after the country’s central bank unexpectedly left interest rates unchanged.
The Reserve Bank of New Zealand (RBNZ) was previously expected to deliver a cut today, but instead decided to hold rates steady as it believes the domestic economy will stop slowing and that inflation will pick up.
“Economic developments since the August Statement do not warrant a change to the already stimulatory monetary setting at this time,” the RBNZ said Wednesday after holding the official cash rate at a record-low 1.0%. “We will add further monetary stimulus if needed.”
The NZD/USD pair jumped 1.2% to 0.6398 by 12:02 AM ET (04:02 GMT) following the decision.
The AUD/USD pair remained little changed at 0.6843.
The GBP/USD pair inched up 0.1% to 1.2849. The pound had surged earlier this week after Brexit Party head Nigel Farage said his party won't contest any seats currently held by the Conservative Party, increasing the chance that Prime Minister Boris Johnson’s EU withdrawal agreement is secured.
The USD/JPY pair inched up 0.1% to 109.05.
The U.S. Dollar Index was little changed at 98.165 despite heightened Sino-U.S. trade tension. Overnight, U.S. President Donald Trump said at the Economic Club of New York that “no one has manipulated better or taken advantage of the United States more” since China’s entrance into the World Trade Organization in 2001.”
“I will not say the word ‘cheated,’ but nobody’s cheated better than China, I will say that,” the president said, threatening that the U.S. will “substantially” increase tariffs on China if no deal is reached.
“If we don’t make a deal, we’re going to substantially raise those tariffs,” he said. “They’re going to be raised very substantially. And that’s going to be true for other countries that mistreat us too.”
Later on Wednesday, U.S. Federal Reserve Chairman Jerome Powell is due to testify on the U.S. economic outlook