NZD/USD is showing limited movement on Wednesday, as the pair trades at 0.6770 in the North American session. In economic news, the New Zealand current account deficit widened to NZD 4.75 billion. Later in the day, New Zealand will release the all-important GDP.
There was positive news out of New Zealand on Tuesday, as the GDT Price Index posted a gain of 1.9%. This was a second straight gain for the key indicator, breaking a nasty streak of three consecutive declines. Current Account jumped to NZD 4.75 billion, slightly better than the estimate of NZD 4.85 billion. This marked a 4-month high for the indicator. Will we get better news from GDP?
The currency markets are in a holding pattern on Wednesday, ahead of the crucial Fed meeting which could prove to be the economic release of the year. The Fed will conclude a two-day policy meeting later on Wednesday and the stage is set for the Fed to raise rates by 0.25%, with further rate hikes to follow in 2016. The Fed last raised rates back in June 2006, and Fed chief Janet Yellen and other policymakers have sent broad signals to the markets that the US central bank if finally ready to press the rate trigger. The US economy is close to full employment, and Yellen recently stated that she was not concerned about persistently low inflation. How will the currency markets react to a historic rate hike by the Fed? Given that the markets have had ample time to price in this event, we may not see a strong response immediately after the event. At the same time, even a small rate increase represents a huge shift in the Fed’s monetary policy, which could help boost the US dollar against its rivals over the next few months.
Wednesday (Dec. 16)
- 13:30 US Building Permits. Estimate 1.16M. Actual 1.29M
- 19:00 US FOMC Economic Projections
- 19:00 US FOMC Statement
- 19:00 US Federal Funds Rate. Estimate <0.50%
- 19:30 US FOMC Press Conference
- 21:45 New Zealand GDP
*Key releases are highlighted in bold
*All release times are GMT
NZD/USD for Wednesday, December 16, 2015
NZD/USD December 16 at 17:45 GMT
NZD/USD 0.6773 H: 0.6776 L: 0.6739
- 0.6738 remains under strong pressure in support, and could break during the North American session.
- 0.6897 is a strong resistance line.
- Current range: 0.6738 to 0.6897
Further levels in both directions:
- Below: 0.6738, 0.6605, 0.6449 and 0.6368
- Above: 0.6897, 0.70, and 0.7128
OANDA’s Open Positions Ratio
NZD/USD ratio is showing a majority of short positions (54%). This is indicative of trader bias towards the pair moving to lower levels.
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