Asian Stocks Near Two-Year Highs Amid Rate Cut Speculations

Asian stocks neared two-year highs on Wednesday as expectations of imminent U.S. rate cuts grew. Meanwhile, the New Zealand dollar slid following its central bank's signal of greater confidence in controlling inflation. Global stocks rallied on Fed easing cycle expectations, while the U.S. dollar remained firm.

Asian stocks hovered near two-year highs on Wednesday, propelled by increasing bets on imminent U.S. rate cuts. The New Zealand dollar took a hit after its central bank expressed confidence in reining in inflation. The Reserve Bank of New Zealand (RBNZ) held its cash rate steady at 5.5% but indicated inflation would fall within the 1% to 3% target range later in the year.

The kiwi dropped over 0.7%, with traders ramping up bets on RBNZ rate cuts this year. "Their indication that the CPI could normalize rapidly contributed to this," said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.

Global stock markets gained on expectations of a September Fed easing cycle, while Fed Chief Jerome Powell indicated the U.S. economy is no longer overheating. However, he provided little detail on the timing of rate cuts. In commodities, oil prices dipped, while gold prices rose slightly.

(With inputs from agencies.)