NZD/USD little changed as FOMC meeting was in focus

New Zealand dollar traded with a slight change against its US counterpart on Tuesday, as investors remained wary ahead of the decision by the Federal Reserve Bank regarding stimulus.

NZD/USD touched a session high at 0.8189 at 1:30 GMT, the pairs highest point since May 16th, after which consolidation followed at 0.8177, gaining 0.07% on a daily basis. Support was likely to be received at September 11th low, 0.8038, while resistance was to be met at May 16th high, 0.8272.

US dollar lost ground on a large scale on Monday, after Lawrence Summers left the contest to succeed Ben Bernanke as the next Federal Reserve Chairman. Currently, Vice Chairman Janet Yellen is President Barack Obama’s top candidate to take over the post of Governor of the central bank.

At the same time, market players were eyeing the two-day meeting on policy by the Federal Reserve, as most analysts projected a possible reduction of scale of stimulus to 75 billion USD from the current monthly pace of 85 billion USD of asset purchases.

Meanwhile, the probability that the Reserve Bank of New Zealand will consider a raise in its benchmark interest rate from the current record low level of 2.5% by April 2014 was estimated at 89%, according to Bloomberg.

A positive signal for the kiwi dollar came out of China, which is New Zealands second largest export partner. The Conference Board research group reported that Chinese leading index increased by 0.7% in August to reach a reading of 269.3, following the 1.4% gain in July and 0.8% gain in June.

New Zealand’s Treasury projected that economy will show a 0.2% contraction during the second quarter of the year, Associate Finance Minister Steven Joyce stated in parliament ahead of the release of the official report on September 19th. New Zealands Gross Domestic Product is expected to have gained also 0.2% during the same period, in accordance with a survey of experts by Bloomberg News.

Elsewhere, the kiwi was higher against the Australian dollar, as AUD/NZD cross dropped 0.15% for the day to trade at 1.1392 at 8:38 GMT.