Dollar records gains, NZ increases interest rates

The dollar continued its gains on Wednesday morning in Asia and hovered near its highs this year. Investors’ focus shifted to New Zealand’s move in raising its interest rate on Wednesday and to the latest United States’ jobs report due on Friday.

The U.S. Dollar Index that measures the greenback against other major currencies tallied an increase 0.06% to 94.047 by 10:46 PM ET (2:46 AM GMT).

The USD/JPY pair climbed 0.13% to 111.59.

The AUD/USD pair slid 0.38% to 0.7263, while the NZD/USD pair declined 0.39% to 0.6935.

The USD/CNY pair remained at 6.4467, with Chinese markets closed for a holiday. The GBP/USD pair went down by 0.11% to 1.3614.

Investors have increasingly resorted to the safe-haven dollar as the U.S. Federal Reserve prepares to begin asset tapering in 2021 and raise interest rates in 2022. The U.S. jobs data, which includes non-farm payrolls, is expected to be issued on Friday and is viewed as critical to the Fed’s asset reduction plan.

Meanwhile, the Reserve Bank of New Zealand (RBNZ) raised its interest rate to 0.50% from the previous month’s 0.25% as it reported its latest policy decision today.