FX.co ★ New Zealand Shares Drop Ahead of RBNZ Decision

New Zealand's stock market experienced a dip on Wednesday, declining by 37 points, or 0.3%, to settle at 12,546 during early trading. This marks the lowest point since May 8 and interrupts the positive momentum from the previous session. The decrease in the equity market precedes the Reserve Bank of New Zealand’s (RBNZ) anticipated monetary policy announcement later in the day. The central bank is forecasted to reduce its official cash rate by 25 basis points to 3.25%, thereby setting borrowing rates at their lowest since September 2022. Despite this, investors remain attentive to inflation concerns, as the country's consumer prices surged by 0.9% in the first quarter of 2025, the highest rise noted since September 2023. Additionally, market observers are keenly awaiting key addresses from several Federal Reserve officials this week, hoping to gain more clarity on the prospective direction of interest rates. Capping the downward trend was a rally in the U.S. market overnight, following President Trump's decision to defer the implementation of hefty tariffs on the euro area. The NZ market was particularly pressured by downturns in the financial and utility sectors, with significant losses from companies such as Infratil, down 3.7%, the Colonial Motor Company, declining 2.5%, and Winton Land, which fell by 2.3%.