NZD/USD trades above mid-0.5800s but remains capped ahead of FOMC decision
- NZD/USD attracts some buyers during the Asian session, though it lacks follow-through.
- A positive risk tone keeps the USD bulls on the defensive and lends support to the Kiwi.
- Reduced Fed rate cut bets limit USD losses and cap the pair ahead of the FOMC decision.
The NZD/USD pair edges higher during the Asian session on Wednesday and currently trades just above mid-0.5800s, though it lacks bullish conviction. Spot prices remain below a technically significant 200-day Simple Moving Average (SMA) as traders keenly await the crucial FOMC rate decision before placing fresh directional bets.
The US Dollar (USD) is seen consolidating following the recent pullback from its highest level since May 2025 and lending some support to the NZD/USD pair. A generally positive tone around the equity markets dents demand for traditional safe-haven assets and keeps the USD bulls on the defensive. However, expectations that the recent surge in crude oil prices would rekindle inflation and force the US Federal Reserve (Fed) to delay cutting interest rates should act as a tailwind for the USD.
Hence, the market focus will remain glued to the outcome of a two-day FOMC policy meeting, scheduled to be announced later during the North American session. The outlook will play a key role in influencing the near-term USD price dynamics and help in determining the near-term trajectory for the NZD/USD pair. In the meantime, rising tensions in the Middle East might keep a lid on any optimism, which should benefit the safe-haven Greenback and cap the upside for the perceived riskier Kiwi.
In the latest developments, Iran's top security official, Ali Larijani, and the head of the paramilitary Basij force, Gholamreza Soleimani, have been killed in Israeli air strikes on Tuesday. Iran's army vows revenge for security chief Larijani’s killing. Moreover, the US military said that it targeted sites along Iran’s coastline near the Strait of Hormuz – a critical energy chokepoint. This keeps geopolitical risks in play, which favors the USD bulls and should cap gains for the NZD/USD pair.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.98% | -0.85% | -0.35% | -0.25% | -1.70% | -1.19% | -0.61% | |
| EUR | 0.98% | 0.15% | 0.55% | 0.72% | -0.73% | -0.23% | 0.36% | |
| GBP | 0.85% | -0.15% | 0.53% | 0.57% | -0.87% | -0.38% | 0.27% | |
| JPY | 0.35% | -0.55% | -0.53% | 0.12% | -1.35% | -0.83% | -0.27% | |
| CAD | 0.25% | -0.72% | -0.57% | -0.12% | -1.50% | -0.94% | -0.35% | |
| AUD | 1.70% | 0.73% | 0.87% | 1.35% | 1.50% | 0.50% | 1.11% | |
| NZD | 1.19% | 0.23% | 0.38% | 0.83% | 0.94% | -0.50% | 0.56% | |
| CHF | 0.61% | -0.36% | -0.27% | 0.27% | 0.35% | -1.11% | -0.56% |
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.
