The Reserve Bank of New Zealand (RBNZ) announced its interest rate decision on Wednesday morning at the conclusion of its July 9 meeting, keeping the official cash rate unchanged at 3.25% — the lowest level since April 2022 — in line with market expectations.

The RBNZ stated that it expects to ease monetary policy if medium-term inflationary pressures continue to decline as anticipated.

The Australian dollar began Tuesday’s session on a higher note after the Reserve Bank of Australia surprised markets by keeping the interest rate unchanged at 3.85%, defying expectations of a 25-basis-point cut.

Meanwhile, investors await the release of the NFIB Business Optimism Index for June, the only item on today’s US economic calendar, as attention remains focused on news related to US tariff policies.

RBA holds steady despite market expectations

The RBA announced in its statement early Tuesday that it decided to maintain the benchmark interest rate, citing the need for more data to confirm that inflation is steadily moving toward the 2.5% target.

At the press conference following the meeting, Governor Michele Bullock said it was appropriate to take a “cautious and gradual approach to monetary easing,” while also noting that the bank could anticipate further rate cuts if inflation slows as expected.

The decision contradicted market expectations for a rate cut, prompting the Australian dollar to recover after losing nearly 1% on Monday.

As of 19:52 GMT, the Australian dollar was up 0.6% against the US dollar at 0.6531.

Trump extends tariff deadline and warns Japan and South Korea

Late Monday, the White House announced that President Donald Trump had signed an executive order extending the deadline for new tariffs until August 1.

Despite this extension, Trump confirmed that the US would impose 25% tariffs on imports from Japan and South Korea, warning that if any country decided to raise its own tariffs, the increase would be added directly to the 25% rate imposed by the US.

These statements triggered a broad sell-off on Wall Street Monday, with major indices closing sharply lower, while the US Dollar Index (DXY) surged to a two-week high, rising more than 0.5% during the day.

However, on Tuesday morning, the dollar index began to decline and is now trading below the 97.50 level, while US stock futures are showing slight gains.

Michele Bullock reveals division within the RBA board

During the post-meeting press conference, Michele Bullock revealed that the board had a “very active discussion” on whether to hold or cut rates.

She clarified that the division was not about the direction of monetary policy but rather the timing. “The group in favor of a cut saw the economic data as slightly weaker and was more concerned about downside risks, especially internationally,” she said.

RBA reform recommendations now taking effect

This internal divergence comes amid structural reforms at the central bank. A key recommendation from the RBA’s comprehensive 2023 review was to publish how board members voted on rate decisions—without naming individuals—to enhance transparency and accountability.

Most of the review’s 51 recommendations have already been implemented, including:

Creating two separate boards for the bank instead of one

Reducing the number of interest rate meetings from 11 to 8 per year

Extending monetary policy meetings to span two days instead of one

Holding a press conference after each rate decision

One of the main recommendations still in progress involves publishing the number of votes for, against, and abstaining from each interest rate decision in the post-meeting statement.

Canadian dollar

As of 19:53 GMT, the Canadian dollar rose by less than 0.1% against its US counterpart to 0.7311.

US dollar

At 19:10 GMT, the US Dollar Index was up by less than 0.1% at 97.5 points, after recording a high of 97.8 and a low of 97.1.

On Monday, President Trump announced that his administration would impose 25% tariffs on imports from South Korea and Japan starting August 1, as part of a broader batch of tariff notifications sent to several countries.

The White House confirmed that Trump would sign an executive order to extend the temporary freeze on reciprocal tariffs until August 1, giving targeted countries an additional three weeks to reach agreements.

Today, Trump reiterated that the final deadline for the new tariffs would not be extended beyond August 1.

US Treasury Secretary Scott Bessent commented that the tariff policy would generate more than $300 billion in revenue for the US by the end of the year.

In a separate development, Trump renewed his criticism of Federal Reserve Chairman Jerome Powell, calling for his immediate resignation.

Gold prices declined during Tuesday trading amid a rise in the US dollar against most major currencies, alongside continued market focus on trade war developments.

US President Donald Trump announced on Monday that his administration would impose a 25% tariff on imports from South Korea and Japan starting August 1, as part of a new round of tariff messages to be sent to several foreign countries.

The White House confirmed on Monday that President Trump would sign an executive order to extend the temporary freeze on so-called “reciprocal tariffs” until August 1, giving targeted countries an additional three-week window to reach trade agreements with the United States.

Trump stated today that there would be no extension to the final deadline for the implementation of additional tariffs after August 1.

US Treasury Secretary Scott Bessent commented on the trade policy, saying that tariffs would generate revenues exceeding $300 billion for the United States by the end of this year.

In a separate context, Trump renewed his attacks on Federal Reserve Chairman Jerome Powell, demanding the latter’s immediate resignation.

The US Dollar Index rose by less than 0.1% to 97.5 points as of 19:10 GMT, recording a high of 97.8 points and a low of 97.1 points.

In terms of trading, spot gold contracts fell by 0.8% to $3,315.10 an ounce as of 19:11 GMT.

US President Donald Trump threatened to impose an additional 10% tariff on any country that supports what he described as “anti-American policies” issued by the BRICS group, a political and diplomatic coordination forum comprising 11 countries.

Trump said via the Truth Social platform on Sunday evening that any country aligning itself with the anti-American policies adopted by BRICS would be subject to an additional 10% tariff, and that there would be no exceptions to this policy.

Trump did not clarify exactly what he meant by “anti-American policies” in this context, but he had previously warned the group against creating a new BRICS currency or supporting any alternative to the “great American dollar.”

At the conclusion of the BRICS summit held in Rio de Janeiro on Monday, Brazilian President Lula da Silva responded to Trump’s threat by saying that the world has changed and that no one wants an emperor, adding that BRICS is a group of countries seeking a new way to organize the world economically, and that this is why some feel uncomfortable with BRICS.

Trump’s threat comes ahead of a planned announcement of tariff agreements

The threat followed Trump’s statement that tariff agreements and letters with a number of countries would be revealed starting at 12:00 PM Eastern Time on Monday, ahead of the temporary tariff freeze deadline set for July 9.

Although countries are encouraged to finalize agreements before July 9, the Trump administration later clarified that the higher tariffs would not take effect before August 1.

Since Monday afternoon, Trump has posted a large number of trade agreement letters on social media.

He has imposed a 25% tariff on imports from South Korea and Japan and announced new tariff rates on twelve other countries.

Before this week, Trump had only announced tariff agreements with three countries: the United Kingdom, China, and Vietnam.

Trump’s threat loomed over the closing of the BRICS summit in Brazil

During the final part of the two-day BRICS summit, Trump’s direct threat dominated the atmosphere, as the attending leaders signed on Sunday a joint statement titled “Strengthening South-South Cooperation for More Inclusive and Sustainable Governance.”

On Monday, the leaders maintained a unified position in response to the threats issued by Trump.

What is the BRICS group?

BRICS was founded in 2001 — originally comprising Brazil, Russia, India, China, and South Africa — as a forum for emerging and developing countries to enhance cooperation on trade, security, and diplomacy.

South Africa was invited to join in 2010, and since then other countries have joined, including Saudi Arabia, Egypt, Iran, Ethiopia, the UAE, and Indonesia, bringing the total number to 11 countries.

BRICS has also established ties with strategic partner countries during last year’s summit, including Belarus, Bolivia, Kazakhstan, Cuba, Malaysia, Thailand, Uganda, Uzbekistan, and Nigeria, and Vietnam was officially announced as the tenth partner country in June.

The group presents a challenge to the unipolar vision of global power that places the United States as the dominant superpower.

Instead, BRICS promotes a multipolar model where various countries collaborate on the global stage.

Some experts believe the era of US dominance over the global system has come to an end and that the shift to a multipolar order has already begun.

BRICS states that it accounts for 24% of global trade and represents 39% of global GDP.

On the first day of this year’s summit, BRICS countries issued a joint statement expressing concern about the “arbitrary increase in tariffs,” without directly naming the United States or Trump.

The statement said that the group is seriously concerned about the escalation of unilateral tariff measures and non-tariff barriers that distort trade and violate WTO rules.

The BRICS countries also emphasized their vision for the future of the global system, stating the importance of the Global South as a driving force for positive change, especially amid growing international challenges, including escalating geopolitical tensions, economic slowdown, rapid technological transformations, rising protectionism, and migration challenges.

How did BRICS leaders respond to Trump’s threat?

Brazil’s president was not the only one to respond to Trump’s public threat.

Kremlin spokesman Dmitry Peskov said on Monday that BRICS does not operate with the intent of undermining other countries.

He added that similar statements have already been seen from President Trump, but it is important to stress that the uniqueness of a group like BRICS lies in the fact that it brings together countries with shared visions for cooperation based on their sovereign interests, and that this cooperation has never been, and will never be, directed against third parties.

China’s Ministry of Foreign Affairs said it opposes the use of tariffs as a tool of pressure.

Chinese Foreign Ministry spokesperson Mao Ning stated that China’s position on increased US tariffs is very clear, and that trade wars have no winners, and economic protectionism leads nowhere.

South Africa’s Ministry of Trade spokesperson Kameel Alli told Reuters that the country is still awaiting an official notification from the United States regarding its trade agreement, but said the talks remain constructive and productive, and reiterated that South Africa is not against America.

Indonesia’s Coordinating Minister for Economic Affairs, Airlangga Hartarto, is scheduled to travel to the United States on Monday following the conclusion of the BRICS summit, with tariffs expected to be at the top of the agenda.

Previous threats from Trump to BRICS.

This is not the first time Trump has threatened the BRICS group.

In November, following his presidential election victory, he threatened to impose 100% tariffs on BRICS countries if they chose to “move away” from the US dollar.

At the time, Trump said that the idea of BRICS countries trying to abandon the dollar while the US does nothing is over, and that the US demands a commitment from these countries not to create a new BRICS currency or support any alternative to the great American dollar, otherwise they should expect 100% tariffs and say goodbye to the amazing American market.