The US dollar is mixed as the North American traders enter for the day. In the video above, I outline for traders the technical levels that are in play for the three major currency pairs – the EURUSD, USDJPY and GBPUSD. The USD is higher versus the EUR and the GBP, but lower vs the JPY.

Overnight, the RBNZ cut rates by 50 bps to 3.75% from 4.25%. It was the fourth consecutive cut. Yesterday the RBA cut for the first time in four years and the first time after 10 consecutive meetings of unchanged policy.

RBNZ Governor Orr confirmed that a rate cut in April followed by another in May, likely in two 25bp steps, is appropriate. The Reserve Bank of New Zealand (RBNZ) cut its cash rate by 50bp as expected, marking the third consecutive reduction of this magnitude (and the 4th in a row after cutting by 25 bps to kickstart the process). Orr highlighted that the economy has significant spare capacity, with slower economic growth being a key near-term risk. He noted that 3.75% represents the high end of the neutral rate range and suggested that GDP growth in New Zealand could accelerate if confidence returns. Longer-term risks include US tariffs, which could slow global growth. On foreign exchange, Orr stated that the NZD is currently around fair value.

UK CPI inflation came in higher than expected 3.0% versus 2.8% estimate. That is up from 2.5% last month. The core came in at 3.7% as expected.

IN other central bank chatter overnight:

BOJ policymaker Hajime Takata stated that long-term interest rates are moving in line with Japan's economic conditions, emphasizing that real interest rates remain negative. Following the BOJ's abandonment of YCC, he noted that markets must determine yield levels, though the central bank remains vigilant against sharp rises in market volatility. He declined to comment on JGB yield levels and said it is difficult to assess the impact of Trump’s policies on the U.S. economy, though uncertainty has eased due to strong job growth. Takata reiterated that the BOJ has no preset timeline or target for future rate hikes, emphasizing that decisions will be based on corporate activity, economic performance, and market movements. He highlighted core inflation excluding fresh food as a key metric but acknowledged that rising fresh food costs could influence household inflation expectations. As the neutral rate approaches, he noted, estimating its exact level becomes more challenging
ECB executive board member Fabio Panetta noted that signs of weakness in the Eurozone economy are more persistent than expected. While a recovery driven by consumer spending was anticipated, it has not materializedA look around the markets as North American traders enter for the day:
ECB board member Isabel Schnabel indicated that the central bank is nearing a point where it may pause or halt rate cuts. She noted that R* is not a reliable real-time guide for monetary policy and that the level of restriction has declined significantly, making it uncertain whether policy remains restrictive. While the savings rate has started to decline, domestic inflation and wage growth remain elevated, with recent shocks to energy prices adding to inflation risks. However, she expects services inflation to ease in February and sees signs that wage growth will decelerate. Despite inflation risks being somewhat skewed to the upside, Schnabel ruled out a rate increase.

US yields are modestly higher to start the North American session:

  • 2-year yield 4.301%, +0.4 basis points
  • 5-year yield 4.400%, +0.7 basis points
  • 10-year yield 4.567%, +2.4 basis points
  • 30-year 4.794%, +3.2 basis points

Looking at the premarket for US stocks, the futures are implying a mixed opening. The S&P index yesterday closed at a record level after an up and down trading session.

  • Dow industrial average down -82 points
  • S&P down -5.33 points
  • NASDAQ index up 1.0 points

Below are the changes from yesterday for the major indices:

  • Dow industrial average -+10.26 points or 0.02% at 44,556.24
  • S&P index up 14.95 points or 0.24% at 6,129.58.
  • NASDAQ index rose 14.49 points or 0.07% at 20,041.26

European shares are lower today. The German Dax closed at a new record yesterday. Not today (or so it seems):

  • German DAX -0.97%.
  • France's CAC -0.72%
  • UK's FTSE 100 -0.59%
  • Spain's Ibex -0.94%
  • Italy's FTSE MIB -0.10%

In other markets:

  • WTI crude oil is up $0.67 or 0.74% $72.36
  • Spot gold is trading up five dollars or 0.17% at $2940.55
  • Silver is trading up up $0.10 or 0.31% at $32.94
  • Bitcoin is trading up $676 and $96,286

US housing starts and building permits will be released at the bottom of the hour with Housing starts expected at 1.390 million (versus 1.499 million last month) annualized, while building permits are expected at 1.460 million (versus 1.483 million last month).

At 1 PM, the US treasury will auction off 20 year bonds, and at 2 PM ET the US Federal Reserve will release their meeting minutes from the last meeting where the Fed Rates unchanged but tweeked the comment on inflation which Fed Chair Powell called a language adjustment and not a policy shift. The minutes will be combed for inflation shifts.

Source: Forex Live