Most Asian currencies were little changed on Wednesday in subdued Lunar New Year trade, while the New Zealand dollar weakened after the country's central bank held interest rates steady and reiterated an accommodative policy outlook.
Trading volumes across the region were thin with major markets including China and Hong Kong closed for the holiday, muting moves in Asian foreign exchange despite broader dollar consolidation ahead of key U.S. data.
The US Dollar Index edged 0.1% higher after gaining modestly overnight. US Dollar Index Futures also traded 0.1% higher as of 04:01 GMT.
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RBNZ holds rates steady; NZ dollar slides The kiwi dollar's NZD/USD pair slid nearly 1% after the Reserve Bank of New Zealand kept its official cash rate at 2.25% and signalled policy would remain supportive as inflation returns to target.
The bank expects price growth to fall toward the 2% midpoint over the next year amid spare capacity and modest wage pressures.
Markets pared expectations for near-term tightening, with rate-hike odds pushed further into late-2026, weighing on the currency.
"The generally dovish tone significantly moves the balance of risk away from an earlier start to the tightening cycle," Westpac analysts said in a note.
"We continue to expect that there will be no further policy easing this cycle and that the RBNZ will begin to raise the OCR from the December 2026 meeting," they added.
Japan exports jump above expectations; Fed minutes awaited Elsewhere, Japan released January trade data showing exports jumped 16.8% year-on-year while imports fell, leaving a smaller-than-expected 1.15 trillion yen deficit.
The Japanese yen's USD/JPY pair edged 0.1% higher
Regional currencies remained broadly range-bound as investors looked ahead to minutes from the U.S. Federal Reserve’s January meeting later on Wednesday and the U.S. personal consumption expenditures (PCE) price index due Friday for fresh clues on the global rate outlook.
The South Korean won's USD/KRW pair traded flat, while the Singapore dollar's USD/SGD gained 0.1%.
The Chinese yuan's USD/CNH offshore pair also traded largely unchanged, while the Indian rupee's USD/INR rose marginally.
The Australian dollar's AUD/USD pair dipped 0.2%.
