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The New Zealand dollar came under pressure against other major currencies in the Asian session on Wednesday, after the Reserve Bank of New Zealand raised interest rates by a quarter-percentage point, in line with expectations, but signaled that further rate hike is over to curb inflation.

The Reserve Bank of New Zealand raised its benchmark rate by 25 basis points from 5.25 percent to 5.5 percent, as expected by the economists.

"The OCR will need to remain at a restrictive level for the foreseeable future, to ensure that consumer price inflation returns to the 1% to 3% annual target range, while supporting maximum sustainable employment," the RBNZ Monetary Policy Committee said in its statement. Asian share markets traded lower, amid worries about growth and interest rates, and increasing concerns over a standoff in Republican-manufactured U.S. debt ceiling confrontation.

U.S. President Joe Biden and House Speaker Kevin McCarthy said they held productive talks but there was no agreement on how to raise the government's $31.4 trillion debt ceiling.

The minutes of the Fed's latest monetary policy meeting are also likely to attract attention, as traders look for additional clues on the outlook for interest rates.

In economic news, data from Statistics New Zealand showed that the volume of overall retail sales in New Zealand was down a seasonally adjusted 1.4 percent on quarter in the first quarter of 2023. That was shy of expectations for an increase of 0.2 percent following the downwardly revised 1.0 percent contraction in the previous three months (originally -0.6 percent).

The value of retail sales was up 4.7 percent on quarter. On a yearly basis, retail sales fell 4.1 percent, again missing expectations for a gain of 3.6 percent following the 4.0 percent decline in the three months prior.

In the Asian session today, the NZ dollar fell to a 3-week low of 0.6169 against the U.S. dollar and a 1-week low of 85.43 against the yen, from yesterday's closing quotes of 0.6247 and 86.59, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.58 against the greenback and 81.00 against the yen.

Against the euro, the kiwi dropped to 9-day low of 1.7461 from yesterday's closing value of 1.7228. The kiwi is likely to find support around the 1.78 area.

Moving away from an early 2-day high of 1.0567 against the Australian dollar, the kiwi slipped to an 8-day low of 1.0695. The next support level for the kiwi is seen around the 1.08 area.

Meanwhile, the Australian dollar, the other Antipodean currency partner of NZ dollar, also fell against its major rivals after the RBNZ rate decision.

The Australian dollar fell to a 1-week low of 1.6351 against the euro and a 6-day low of 91.19 against the yen, from yesterday's closing quotes of 1.6284 and 91.59, respectively. If the aussie extends its downtrend, it is likely to find support around 1.67 against the euro and 87.00 against the yen.

Against the U.S. and the Canadian dollars, the aussie dropped to nearly a 4-week low of 0.6585 and a 6-month low of 0.8897 from yesterday's closing quotes of 0.6609 and 0.8922, respectively. On the downside, 0.63 against the greenback and 0.86 against the loonie are seen as the next support level for the aussie.

Looking ahead, German Ifo business confidence index for May is due to be released at 4:00 am ET. Economists expect the business confidence index to fall to 93.0 in May from 93.6 in April.

At 5:30 am ET, Bank of England Governor Andrew Bailey gives a keynote speech at the Net Zero Delivery Summit hosted by the City of London Corporation.

At 6:00 am ET, the Confederation of British Industry publishes Industrial Trends survey results. The UK order book balance is seen at -19 percent versus -20 percent in April.

In the New York session, U.S. MBA mortgage rate data and U.S. EIA weekly crude oil report are slated for release.

At 12:10 pm ET, Federal Reserve Board Governor Christopher Waller will deliver a speech on economic outlook at the University of California Santa Barbara conference: 2023 Santa Barbara County Economic Summit.

At 1:45 am ET, the European Central Bank President Christine Lagarde will deliver a speech, is expected to throw some light on June's monetary policy.

Fifteen minutes later, Federal Open Market Committee (FOMC) will issue minutes from its meeting of May 2-3, 2023.

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