NZD/USD loses momentum near the 0.6100 mark, Fed rate decision looms

NZD/USD loses ground near 0.6100 ahead of the key US event.
The new coalition government of New Zealand passed legislation to abandon the RBNZ dual mandate and focus solely on price stability.
The Federal Reserve (Fed) is widely expected to hold interest rates steady at 5.25%–5.50% at its last meeting of the year.
Investors will closely monitor the Federal Reserve's (Fed) monetary policy meeting ahead of New Zealand's GDP growth for Q3.

Lallalit Srijandorn FXStreet

The NZD/USD pair faces some selling pressure during the early European session on Wednesday. The pair hit intraday lows at 0.6093 after retracing from the high of 0.6139. The pair currently trades near 0.6097, down 0.54% on the day.

Early Wednesday, the new coalition government of New Zealand passed legislation to abandon the Reserve Bank of New Zealand's (RBNZ) dual mandate and focus solely on price stability. Additionally, Finance Minister Nicola Willis amended the remit for the RBNZ’s Monetary Policy Committee (MPC), removing the objective to support maximum sustainable employment while keeping the inflation target at 1-3%.

Apart from this, New Zealand’s annual Current Account deficit arrived at 7.6% of GDP in the third quarter (Q3) ended in September from 7.5% in the previous reading. Investors await the Gross Domestic Product (GDP) for the third quarter. If the report comes in worse than expected, this could weigh on the New Zealand Dollar and act as a headwind for the NZD/USD pair.

On the USD’s front, the Federal Reserve (Fed) is widely expected to hold interest rates steady at its last meeting of the year on Wednesday. The markets anticipate that Fed Chair Jerome Powell will maintain a hawkish tone and push back against the bet for rate cutting. Last week, Fed Chair Powell said it would be premature to say that we have achieved a restrictive stance while adding that the central bank is prepared to tighten policy further if necessary.

US inflation, as measured by Consumer Price Index (CPI) rose by 0.1% MoM and 3.1% YoY in November, matching the market estimation, the US Bureau of Labor Statistics showed on Tuesday. Meanwhile, the Core CPI, which excludes volatile food and energy prices, grew by 0.3% MoM and 4.0% YoY, as expected.

Traders will closely watch the US Producer Price Index (PPI) on Wednesday ahead of the Federal Reserve's (Fed) monetary policy meeting. On Wednesday, the New Zealand GDP growth numbers for Q3 will be released. The quarterly growth rate is estimated to expand 0.2% and the annual rate is forecast to grow 0.5%. Market players will take cues from these data and find trading opportunities around the NZD/USD pair.

NZD/USD

Overview
Today last price	0.6098
Today Daily Change	-0.0033
Today Daily Change %	-0.54
Today daily open	0.6131

Trends
Daily SMA20	0.6097
Daily SMA50	0.5982
Daily SMA100	0.5979
Daily SMA200	0.6088

Levels
Previous Daily High	0.617
Previous Daily Low	0.6104
Previous Weekly High	0.6223
Previous Weekly Low	0.6103
Previous Monthly High	0.6208
Previous Monthly Low	0.5788
Daily Fibonacci 38.2%	0.6145
Daily Fibonacci 61.8%	0.6129
Daily Pivot Point S1	0.61
Daily Pivot Point S2	0.6069
Daily Pivot Point S3	0.6034
Daily Pivot Point R1	0.6166
Daily Pivot Point R2	0.6201
Daily Pivot Point R3	0.6232

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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