NZD/USD sits near three-week top; stays below 0.5800 amid modest USD uptick, ahead of Fed
- NZD/USD retains a positive bias amid the US-China trade optimism, though it lacks bullish conviction.
- A modest USD uptick acts as a headwind for the pair as traders await the key FOMC rate decision.
- The fundamental backdrop suggests that the path of least resistance for the pair is to the upside.
The NZD/USD pair touches a nearly three-week high during the Asian session on Wednesday, though it lacks follow-through buying and remains below the 0.5800 round figure. The fundamental backdrop, however, seems tilted in favor of bulls and backs the case for an case for an extension of the recent goodish recovery move from the 0.5730-0.5725 region, or the lowest level since April touched earlier this month.
The US Dollar (USD) edges higher as traders opt to lighten their bearish bets ahead of the crucial FOMC rate decision, scheduled to be announced later today, and turns out to be a key factor acting as a headwind for the NZD/USD pair. Any meaningful USD appreciation, however, seems elusive in the wake of dovish Federal Reserve (Fed) expectations and concerns about economic risks stemming from a prolonged US government shutdown.
The US central bank is widely expected to cut interest rates by 25-basis-points (bps) at the end of a two-day policy meeting on Wednesday and lower borrowing costs again in December. Traders, however, will scrutinize the accompanying policy statement and Fed Chair Jerome Powell's post-meeting press conference for more cues about the future rate-cut path. The outlook would provide a fresh impetus to the USD and the NZD/USD pair.
Heading into the key central bank event risk, signs of progress in the US-China trade discussions eased market concerns about an all-out trade war between the world's two largest economies. The optimism continues to underpin antipodean currencies, including the Kiwi. This, in turn, offsets the Reserve Bank of New Zealand's (RBNZ) dovish outlook, showing readiness to cut rates further, and validates the positive outlook for the NZD/USD pair.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.14% | 0.14% | -0.05% | -0.04% | -0.20% | 0.00% | 0.09% | |
| EUR | -0.14% | 0.00% | -0.19% | -0.17% | -0.33% | -0.15% | -0.04% | |
| GBP | -0.14% | -0.01% | -0.18% | -0.18% | -0.34% | -0.16% | -0.05% | |
| JPY | 0.05% | 0.19% | 0.18% | 0.00% | -0.14% | 0.05% | 0.14% | |
| CAD | 0.04% | 0.17% | 0.18% | -0.01% | -0.17% | 0.00% | 0.13% | |
| AUD | 0.20% | 0.33% | 0.34% | 0.14% | 0.17% | 0.18% | 0.29% | |
| NZD | -0.01% | 0.15% | 0.16% | -0.05% | -0.01% | -0.18% | 0.10% | |
| CHF | -0.09% | 0.04% | 0.05% | -0.14% | -0.13% | -0.29% | -0.10% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
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