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Forex Today: Kiwi and Aussie rally, US Dollar remains weak

Here is what you need to know on Wednesday, November 26:

The New Zealand Dollar (NZD) and the Australian Dollar (AUD) gather strength on Wednesday as markets react to the Reserve Bank of New Zealand's (RBNZ) policy decisions and inflation data from Australia. In the second half of the day, September Durable Goods Orders and weekly Initial Jobless Claims data will be featured in the US economic calendar before markets take a break for Thanksgiving.

US Dollar Price This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.59%-0.57%-0.16%-0.21%-0.74%-1.19%-0.38%
EUR0.59%0.01%0.45%0.38%-0.16%-0.61%0.20%
GBP0.57%-0.01%0.41%0.38%-0.18%-0.61%0.19%
JPY0.16%-0.45%-0.41%-0.07%-0.66%-1.18%-0.25%
CAD0.21%-0.38%-0.38%0.07%-0.54%-0.99%-0.18%
AUD0.74%0.16%0.18%0.66%0.54%-0.44%0.38%
NZD1.19%0.61%0.61%1.18%0.99%0.44%0.81%
CHF0.38%-0.20%-0.19%0.25%0.18%-0.38%-0.81%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

The RBNZ announced in the early Asian session that it lowered the policy rate by 25 basis points (bps) to 2.25%, as widely anticipated. Updated economic forecasts showed that the RBNZ saw the official cash rate at 2.25% in March 2026 and 2.28% in December 2026. In the post-meeting press conference, RBNZ Governor Christian Hawkesby noted that they feel risks are balanced and reiterated that their central projection is based on the policy rate remaining unchanged through 2026. NZD/USD gathered bullish momentum and was last seen trading slightly below 0.5700, rising more than 1% on the day.

The data from Australia showed that annual inflation, as measured by the change in the Consumer Price Index (CPI), climbed to 3.8% in October from 3.5% in September. This reading came in above the market expectation of 3.6%. AUD/USD benefited from the hot inflation data and was last seen gaining more than 0.5% on the day at 0.6505.

The US Dollar (USD) remains under modest bearish pressure in the European morning on Wednesday, with the USD Index declining toward 99.50 after losing about 0.4% on Tuesday. The Automatic Data Processing's (ADP) weekly report showed on Tuesday that private employers shed an average of 13,500 jobs a week for the four weeks ending November 8, highligting worsening conditions in the labor market. Meanwhile, Wall Street's main indexes extended the risk rally on growing expectations for a Federal Reserve (Fed) rate cut and registered strong gains on Tuesday. Early Wednesday, US stock index futures rise between 0.3% and 0.5%.

GBP/USD capitalized on the renewed USD weakness and rose about 0.5% on Tuesday. The pair continues to edge higher toward 1.3200 in the early European session on Wednesday. Later in the day, UK Chancellor of the Exchequer Rachel Reeves will deliver the Autumn Budget.

EUR/USD builds on Tuesday's gains and advances toward 1.1600 on Wednesday, trading at a fresh weekly high.

USD/JPY finds support following Tuesday's decline and clings to small daily gains above 156.00 in the European morning.

Gold failed to make a decisive move in either direction on Tuesday and closed the day virtually unchanged. XAU/USD holds its ground and trades marginally higher on the day, at around $4,150.

Central banks FAQs

Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.

A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.

A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.

Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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