Kiwi soars on hawkish RBNZ, greenback bounces from 1-month low

Kiwi soars on hawkish RBNZ, greenback bounces from 1-month low

The RBNZ raised the key rate by half a point, as widely expected, but released more hawkish guidance on its future policy path, saying that a larger and earlier hike reduces the risk of inflation becoming persistent.

Meanwhile, the U.S. dollar index - which measures the currency against six major rivals - rallied 0.16% to 101.92, pulling away from its overnight low at 101.64, a level not seen since April 26.

The index retreated 1.23% over the first two days of this week, taking it ever further from the nearly two-decade high above 105 marked mid-month amid a decline in benchmark Treasury yields as traders positioned for a slightly less aggressive path of Federal Reserve rate hikes.

The 10-year Treasury yield edged up to 2.7631% in Tokyo trading, after dipping to a nearly one-month low of 2.718% overnight.

The dollar edged 0.08% higher against its Japanese peer , which is highly sensitive to moves in long-term Treasuries, to trade at 126.945 yen. That's after sliding to a more than five-week low at 126.37 yen in the previous session.

The euro retreated 0.22% to $1.07105, but remained near Tuesday's high of $1.0748, a level not seen since April 25, after European Central Bank President Christine Lagarde