The NZD/USD currency pair stabilized around 0.5950 on Wednesday, after earlier plumbing an intraday low of 0.5923, in the wake of the RBNZ’s policy decision and ahead of the FOMC minutes release.

The Reserve Bank of New Zealand cut its official cash rate by 25 basis points to 3.25% at its May meeting, in line with market consensus.

This way, borrowing costs were brought to their lowest level since August 2022. The rate adjustment came with signals that a more extensive monetary easing cycle may unfold.

The RBNZ monetary policy committee cited elevated commodity prices and easing interest rates as supportive forces for New Zealand’s economic momentum. Despite this, the central bank flagged risks ahead that could hamper recovery.

RBNZ Governor Christian Hawkesby stated that both tariffs and heightened policy uncertainty abroad were anticipated to temper New Zealand’s economic recovery and diminish medium-term inflationary pressures.

The RBNZ now projects the cash rate will descend to 2.92% in Q4 of 2025 and to 2.85% in Q1 of 2026.

Market focus now sets on the minutes of the Federal Reserve’s May meeting, due later today, for clues over US economic outlook and monetary policy trajectory.

Minneapolis Fed President Neel Kashkari said on Tuesday that interest rates should be kept on hold until there is more clarity on how higher tariffs impact inflation.

The NZD/USD currency pair was last up 0.16% on the day to trade at 0.5956.