NZD/USD holds above 0.5760 as the US Dollar eases ahead of the Fed

Finance

NZD/USD holds above 0.5760 as the US Dollar eases ahead of the Fed

The New Zealand Dollar continues to hover below the 0.5800 resistance area on Wednesday, with bears contained above the 0.5750-0.5760 area for now. A somewhat softer US Dollar ahead of the Federal Reserve (Fed) supports the Kiwis consolidation near six-week highs.

The Greenback is pulling back against most peers, pressured by a moderate reversal on US Treasury yields, as investors square their positions ahead of the Feds decision.

The US central bank is widely expected to cut its benchmark interest rate by 25 basis points for the second consecutive time this year, leaving it in the 3.50-3.75 range within a deeply divided Monetary Policy Committee.

A “hawkish cut” by the Fed might support the USD

The main attraction of the event, thus, will be Jerome Powell‘s press conference, where the central bank’s chairman is expected to deliver a hawkish counterpoint and might provide some support to the US Dollar. The upbeat employment figures seen on Tuesday and last weeks sticky inflation figures add reasons to think that way.

Beyond that, Investors will also be attentive to the Dot Plot, which will be contrasted with the market consensus of two to three more rate cuts in 2026.

The New Zealand Dollar pulled back during the early Asian session as inflation data from China failed to cheer investors. Chinas consumer prices accelerated to a 0.7% year-on-year rate, the highest level in nearly two years, but monthly inflation contracted, and deflationary pressures at the factory gate deepened, feeding concerns about the weak domestic demand.

upbeat

China is New Zealands largest trading partner, and these figures have offset the positive impact of the upbeat trade balance data and the sharp increase in exports shown by the Asian leading economy earlier this week.