New Zealand Dollar heads into US data after dueling central bank holds
Both central banks behind NZD/USD left their rates alone on Wednesday, and the Reserve Bank of New Zealand (RBNZ) kept 2.75% with a hike priced near 90%. NZD/USD fell below 0.5600 on the RBNZ's decision, the first time under that level since October 15.
The Reserve Bank of New Zealand (RBNZ) maintained its interest rate at 2.75% during Wednesday's meeting, with a near 90% hike priced. This move left the NZD/USD currency pair falling below the 0.5600 level for the first time since October 15, after which it has since recovered slightly. The RBNZ vote was 4-3 in favor of maintaining the rate, with Governor Graeme Bull among those who held.
New Zealand's major banks had forecast a third consecutive hike. The RBNZ's statement indicated that tighter policy was still likely, despite having just voted against it. In contrast, the Federal Reserve (Fed) maintained its rate range of 3.75%-4.00%. Fed Chair Jerome Powell did not comment on the December meeting, stating he doesn't prejudge meetings.
While Fed Chair Jerome Powell spoke, NZD/USD edged higher, but most of its climb from the RBNZ's low occurred prior to the Fed's decision. US personal spending for September is expected to increase by 0.6%, following a 0.9% rise in the previous release, while income is anticipated to rise by 0.3%, up from 0.2%. Additionally, the Chicago Purchasing Managers Index (PMI) will be released on Friday at 13:45 GMT, with expectations of 56.1 after 58.8.
Both economic indicators will influence the Fed's decision in December, contributing to the rate gap between the US and New Zealand.
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