NZD/CHF holds close to a fresh 2-week peak

The NZD/CHF currency pair held not far from a fresh 2-week high of 0.4965 on Thursday in the wake of the RBNZ’s policy decision.

In the meantime, the Swiss Franc came under pressure after a key US court decision surrounding the Trump ’s tariff policies, which eased trade-related uncertainty.

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.

Meanwhile, the US Court of International Trade ruled that President Donald Trump was not authorized to apply sweeping tariffs using the International Emergency Economic Powers Act without congressional approval.

The ruling eased market concerns and temporarily cleared away protectionist uncertainty, reducing demand for safe-haven assets.

In addition to court-driven sentiment, pressure on the Swiss Franc intensified on expectations that the Swiss National Bank may cut interest rates further. Investors grew concerned that the SNB’s upcoming policy decision could see rates enter negative territory in response to downward pressure on inflation.