NZD/USD also on positive territory before Fed meeting

nzd2Alongside the Aussie, New Zealand dollar traded also higher against its US counterpart on Monday, as the pressure upon the greenback remained amid expectations that the Federal Reserve Bank will decide to leave stimulus unchanged at its upcoming policy meeting this week.

NZD/USD touched a session high at 0.8316 at 7:00 GMT, after which consolidation followed at 0.8308, still gaining 0.35% for the day. Support was likely to be found at October 2nd low, 0.8194, while resistance was to be encountered at October 14th high, 0.8381.

The kiwi dollar strengthened after Asian equities climbed, which boosted demand for higher-yielding currencies. The MSCI Asia Pacific Index of shares rose 1.1%.

At the same time, Reserve Bank of New Zealand (RBNZ) Governor Wheeler and his team will probably maintain the benchmark interest rate at the current record low level of 2.5% at central bank’s meeting on policy on October 31st. Traders saw an 83% probability that policymakers will consider a raise in borrowing costs to 2.75% or even higher by June next year, swaps data by Bloomberg showed.

Meanwhile, Federal Reserve Bank policymakers are expected to meet on October 29th-30th. Analysts project that Fed officials will abstain from trimming the monthly pace of bank’s stimulus program this month and wait until March 18th-19th. According to projections the quantitative easing may be reduced to 70 billion USD per month from the current 85 billion USD per month.

Last Friday a report by Thomson Reuters and the University of Michigan revealed that the final value of the index of consumer confidence in the United States slowed down during late October, reaching 73.2 and also marking its lowest level since December 2012. The final reading of the index in September was 77.5. Analysts had projected that this indicator will remain almost without a change in October in comparison with the preliminary value of 75.2. This would probably also cause a slow down in consumer spending in the country and further boost the case that a delay in the scale back of easing will indeed occur.

Elsewhere, the kiwi was slightly higher against the Australian dollar, as AUD/NZD cross slipped 0.08% on a daily basis to trade at 1.1567 at 8:20 GMT. In addition, EUR/NZD pair was losing 0.40% to trade at 1.6605 at 8:23 GMT.

EUR/USD was trading in a tight range on Monday between 1.3795 and 1.3815 ahead of the Federal Open Market Committee (FOMC) decision on monetary policy.

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