The New Zealand dollar declined broadly in Asian trading on Wednesday against a basket of major and minor currencies, hitting a two-week low versus its US counterpart, due to heavy selling after the results of the first Reserve Bank of New Zealand monetary policy meeting of 2026.

In line with expectations, the New Zealand central bank kept interest rates unchanged at their lowest level in three and a half years, and signaled the need to keep monetary policy accommodative to support the country’s economic recovery.

The Reserve Bank of New Zealand’s comments were less hawkish than markets had expected, which lifted the probability of a 25 basis point New Zealand rate cut at the upcoming April meeting.

Price overview

• New Zealand dollar price today: The New Zealand dollar fell against the US dollar by about 0.9% to 0.5996, the lowest level since February 6, from the day’s opening level at 0.6049, and recorded a session high at 0.6053.

• The New Zealand dollar ended Tuesday’s session up about 0.3% against the US dollar, marking its second gain in the past three days, within a narrow trading range.

Reserve Bank of New Zealand

The Reserve Bank of New Zealand (RBNZ) on Wednesday left the benchmark interest rate unchanged at 2.25%, the lowest level since July 2022, in line with most global market expectations.

The New Zealand central bank holds interest rates at their lowest level in 3.5 years.

The RBNZ confirmed that monetary policy needs to remain accommodative for some time to support the weak economic recovery, and that consumer inflation is expected to return to the target range of 1%–3% in the coming months if conditions evolve as expected.

Updated economic projections from the New Zealand central bank indicate the possibility of starting a gradual normalization cycle (rate hikes) by the fourth quarter of 2026 or early 2027, later than some had anticipated.

The RBNZ expects the official cash rate to reach 2.50% in March 2027 versus 2.75% in its previous projections.

New Zealand interest rates

• Following the meeting above, pricing for a 25 basis point New Zealand rate cut at the April 8 meeting rose to above 80%.

• To reprice those expectations, investors will monitor a series of key economic data from New Zealand in the coming period, including inflation, unemployment, and economic growth figures.

Political turmoil in Caracas dominated headlines at the start of 2026. After the dramatic events of early January and the rewriting of Venezuela’s hydrocarbons law on January 29, analysts quickly began debating the ethical dimensions of renewed US engagement in the Orinoco Belt.

But while the world focuses on politics, the real story is unfolding thousands of miles away, inside the distillation towers stretched along the US Gulf Coast.

To understand why Chevron is moving aggressively to expand Venezuelan production, one must look beyond diplomacy and into refining chemistry.

Imbalance in the US crude mix

The United States is now the world’s largest oil producer. That may sound like energy independence, but the reality is more complex.

Most oil produced from shale formations — such as the Permian Basin — is light and sweet, meaning it is easy to refine and low in sulfur.

However, many US refineries were not designed to process this type of crude. During the 1980s and 1990s, refiners invested billions of dollars to increase oil refinery complexity. They installed coking units, hydrocrackers, and desulfurization systems — facilities specifically built to process heavy, high-sulfur crude from countries such as Venezuela and Mexico.

These systems were designed to buy difficult, discounted barrels and convert them into high-value products such as gasoline, diesel, jet fuel, and petrochemical feedstocks.

Running light crude through these systems is technically possible but economically inefficient. It is like using equipment built for processing scrap metal and feeding it premium-grade material — it works, but margins fall.

For a complex refinery such as Chevron’s Pascagoula facility, heavy crude is not just useful — it is optimal.

Disappearance of heavy barrels

For years, the US Gulf Coast relied on imports to supply this heavy crude slate. That supply picture has changed sharply.

Mexican exports have declined as domestic output fell and local refining capacity expanded. Russian medium and heavy barrels largely disappeared from the US market after sanctions. Canadian heavy crude remains important, but transport constraints prevent it from being a perfect substitute.

The result is a structural refining gap: Gulf Coast refineries need heavy crude to maximize margins, but global availability has become more limited.

This is where Venezuela returns to the picture.

Venezuelan grades such as Merey 16 are dense, high-sulfur, and technically challenging — but exactly what complex refineries are built to run. In the right system, these barrels can generate strong refining margins because they are usually priced at a discount to lighter crudes.

Chevron’s strategic advantage

Chevron’s positioning was not accidental. While many Western companies exited Venezuela during the nationalization and sanctions years, Chevron maintained a presence through special US Treasury licenses, allowing it to preserve infrastructure, relationships, and operational continuity.

Now, with legal reforms and shifting geopolitical conditions, the company holds a first-mover advantage. Analysts expect significant production increases supported by solid project economics. That has been reflected in the company’s share price, which has risen more than 20% since the start of the year.

Chevron can produce heavy oil in Venezuela at relatively low cost, then refine it in its high-complexity US facilities. That allows it to capture value across multiple stages: production, logistics, and end refining margins.

In practice, this is vertical integration working as designed. Instead of selling crude into a volatile market, the company can internalize the economics of the barrel and its derived products, helping balance oil price cycles — higher crude prices support upstream, while lower crude prices support refining.

Molecules drive markets

Public debate around Venezuelan oil is often framed in ethical or political terms. Those considerations matter, but markets ultimately respond to physical realities.

Refineries do not respond to ideology — they respond to API gravity, sulfur content, and product yield curves.

As long as the United States operates some of the most complex refining systems in the world, demand for heavy crude will remain.

Chevron appears to understand that today’s real competitive edge is not just producing more oil, but controlling the right type of molecules. In a market where heavy crude supply is tightening, those molecules translate directly into higher refining margins, stronger cash flow, and a durable competitive advantage.

Major US stock indexes moved within narrow ranges in choppy trading on Tuesday following a long weekend, as heavyweight technology stocks weakened after an AI-led selloff, while the financial sector outperformed the broader market.

The S&P 500 information technology sector trimmed its losses and traded slightly higher, with gains in Nvidia and Apple limiting the impact of a decline in Microsoft shares.

AI pressure and fears over Chinese models

Concerns that artificial intelligence could disrupt existing business models triggered a selloff last week in software companies, brokerages, and trucking firms, pushing the three main Wall Street indexes to their largest weekly losses since mid-November.

Uncertainty increased with rising perceived risks from Chinese AI firms, after Alibaba on Monday unveiled a new AI model, Qwen 3.5, designed to carry out complex tasks independently.

Pressure on software stocks continued, with the broader S&P 500 software index falling 1.4%. CrowdStrike dropped 5%, Adobe lost about 2%, and Salesforce declined between 2% and 5%.

Art Hogan, chief market strategist at B Riley Wealth, said: “It’s an indiscriminate selloff across everything related to technology, with heavier focus on software and the risk of disruption for some application companies. When that kind of momentum builds, it becomes difficult to find stocks that can stand out for a while.”

Main index performance

The Dow Jones Industrial Average rose 33.25 points, or 0.07%, to 49,534.18.

The S&P 500 gained 0.63 points, or 0.01%, to 6,836.80.

The Nasdaq Composite fell 21.58 points, or 0.10%, to 22,525.09.

Banks lead gains

The financial sector stood out as a bright spot, with its S&P 500 sector index rising 1.2%, supported by gains of about 1.5% each in major banks including Goldman Sachs and JPMorgan Chase, which also helped lift the Dow Jones index.

By contrast, materials and energy shares declined, tracking weaker commodity prices.

Focus on the Fed’s preferred inflation data

Market attention this week is centered on the personal consumption expenditures report, the Federal Reserve’s preferred inflation gauge, for signals on the inflation path and its potential impact on the pace of rate cuts.

This comes after softer-than-expected consumer inflation data last week, which slightly strengthened bets on rate cuts this year.

Markets are currently pricing a 52% probability of a 25 basis point rate cut in June, up from about 49% a week earlier, according to CME’s FedWatch tool.

Several Federal Reserve officials, including Michael Barr and Mary Daly, are also scheduled to speak during the day.

Geopolitical developments and market breadth

On the geopolitical front, Iran and the United States reached an understanding during a second round of nuclear talks in Geneva, while stressing that more work is needed.

In market breadth indicators, declining stocks outnumbered advancers by 1.25 to 1 on the New York Stock Exchange, and by 1.28 to 1 on the Nasdaq.

The S&P 500 recorded 37 new 52-week highs versus 9 new lows, while the Nasdaq posted 62 new highs and 170 new lows.

Nickel prices edged lower during Tuesday’s trading after posting strong gains last week, supported by news that the world’s largest nickel mine in Indonesia received a much smaller production quota for this year, which boosted supply concerns.

The three-month benchmark nickel contract on the London Metal Exchange touched $17,980 on Wednesday, its highest level since January 30.

French mining company Eramet said its PT Weda Bay Nickel project — a joint venture with China’s Tsingshan and Indonesia’s PT Antam — received an initial production quota of 12 million wet metric tons for 2026, down from 32 million wet metric tons in 2025, adding that it will apply for an upward revision of the quota.

After a prolonged period of low prices, nickel has jumped about 18.6% over the past three months and reached its highest level in more than three years on January 25, after Indonesia — the world’s largest nickel ore producer — pledged to curb supply.

Nitish Shah, commodities strategist at WisdomTree, said Indonesia clearly recognizes its pricing power, noting that its control of about 60% of global output makes it more influential than OPEC in the oil market. He added that Jakarta has realized it does not need to overproduce to generate strong revenues.

Despite that, the International Nickel Study Group expects a market surplus of 261,000 tons this year. LME futures positioning data also showed that one participant holds a short position in the February contract equal to between 20% and 29% of total open interest.

Nickel came under pressure on Tuesday as the dollar index rose 0.5% to 97.4 points, making dollar-denominated commodities less attractive to holders of other currencies.

In trading, spot nickel contracts were down 0.2% at $16.7K per ton as of 16:26 GMT.