NZDUSD Accumulates Gains Ahead of The FOMC

NZDUSD accumulates gains ahead of the FOMC decision at the start of this week. The New Zealand Dollar (NZD) remains one of the few currencies that has maintained its strong position against major currencies. This current action can largely be attributed to the anticipation of economic stimulus measures in China and the US Federal Reserve’s upcoming decision. Another impact to be felt will be the statement by Chairman Powell. As other currencies struggle against the strengthening US Dollar, the NZD continues to gain traction. A lot of traders are keeping an eye on the NZD/USD direction as they await the Federal Reserve’s decision.

The NZD’s performance is further bolstered by varying market sentiment. Wall Street is performing well, and European bourses are showing signs of recovery. The US Dollar Index has been trading higher against most global currencies, yet the New Zealand Dollar (NZD) has been relatively resilient. This was demonstrated when the June PMI data failed to fuel a boost for the USD with respect to the NZDUSD trend. For June, the PMI fell from 54.40 to 52.40. This suggests that there is global economic tension in the markets. As a result, it could lead to a tightening of the central bank’s intentions.

FOMC Decision Could Be A Turning Point

It remains to be seen how the US Dollar Index will react. This in effect with how Chinese government has recently indicated further stimulus measures. The outcome of the Federal Reserve’s monetary policy decision is yet to be revealed. Both of these events will have a major impact on the various currency pairs, and as such, investors should remain vigilant. The performance of the NZD will depend largely on Chair Jerome Powell’s speech. Given the current state of the market, the NZD/USD direction is still uncertain, but investors remain hopeful that the currency will maintain its strong position.

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