Asia stocks falter, NZ dlr stumbles as RBNZ signals hikes over
Asian stocks on Wednesday extended a global sell-off as U.S. debt ceiling negotiations dragged on without resolution, while the New Zealand dollar tumbled after the central bank caught markets off-guard by flagging that its tightening cycle is over.
The U.S. dollar – paradoxically – remained elevated amid safe-haven demand, which was also a driver of Treasuries and pushed yields lower.
Crude gained, though, as a warning from the Saudi energy minister to speculators raised the prospect of further OPEC+ output cuts.
The New Zealand dollar was one of the major movers in the early Asian day. It dropped more than 1% after the Reserve Bank of New Zealand wrong-footed markets by signalling it’s done with its policy tightening cycle, after raising it by a quarter point. Market pricing had favoured a half-point hike, and were also primed for an extension of the tightening streak.
Japan’s Nikkei (.N225) sank 1.1%, extending its retreat from a post-bubble-era peak to a second day.
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