New Zealand Dollar slides ahead of Fed’s decision
NZD/USD trades close to the 0.5760s, extending a run of losses that has dragged it toward the lower end of its recent range. A broadly firmer US Dollar (USD) is behind the slide, with the greenback supported by climbing United States (US) yields and rate-hike expectations.
The New Zealand Dollar (NZD) has experienced a decline ahead of the Federal Reserve (Fed) decision, trading close to 0.5760 and extending a series of losses. The US Dollar (USD) has strengthened, supported by rising US yields and expectations of a rate hike, while the greenback benefits from risk-averse sentiment. The Fed is anticipated to raise rates by 25 basis points to 3.75%-4.00% on Wednesday.
Meanwhile, the 10-year US Treasury yield has hit its highest level since 2007, surpassing 5% due to a 3% jump in oil, raising concerns about inflation. New Zealand's Q2 Gross Domestic Product (GDP) is forecast to slow significantly to 0.1% on the quarter from 0.8%. The NZD/USD pair trades at 0.5757 on the 4-hour chart, under pressure as it dips below both the 20 and 100-period Simple Moving Averages (SMAs), leaving initial resistance at the 20-period SMA near 0.5787 and the 100-period SMA at 0.5877. The Relative Strength Index (RSI) indicates persistent bearish momentum near 30.
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