TOKYO: The US dollar held firm on Wednesday on the back of tariff concerns and tense Russia-Ukraine negotiations, while the New Zealand dollar slid after the central bank delivered a super-sized interest rate cut.
The Reserve Bank of New Zealand reduced its benchmark rate by 50 basis points to 3.75% on Wednesday as widely expected. The central bank has now cut rates by 175 basis points since August as the central bank races to boost a sluggish economy and curb rising unemployment.
The kiwi was last down 0.3% at $0.5687 following the decision and bank commentary that suggested more cuts were likely.
In the broader market, investors sized up the latest note in U.S. President Donald Trump’s tariff crescendo and uncertainty after initial Russia-Ukraine peace talks finished without Kyiv or Europe at the table.
A majority of economists polled by Reuters this month expect another 50-basis-point cut in April.
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 U.S.-Russia talks.
Russia hardened its demands, notably insisting it would not tolerate the NATO alliance granting membership to Kyiv.
The Trump administration said on Tuesday it agreed to hold more talks with Russia on ending the war in Ukraine.
Hopes of a peace agreement buoyed the euro to a two-week high last week, but the EU bloc currency has slid in recent days. It was last 0.03% lower at $1.0442.
“The euro (is) a little unsettled by the clear divisions between the U.S. and Europe regarding the war in Ukraine,” said Sean Callow, senior FX analyst at InTouch Capital Markets.
The greenback shot up on Tuesday, helped by euro softness, but remains not far off a two-month low of 106.56 touched on Friday despite more tariff pledges.
Wall Street’s main indexes ended marginally higher on Tuesday, with the S&P 500, the biggest gainer,
