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NZD/USD falls before RBNZ policy meeting, Fed

dollar20NZmoney1200New Zealand weakened against its US peer before the Reserve Bank of New Zealand policymakers meet on October 31st and also ahead of Federal Reserve Banks two-day meeting, scheduled to begin later today.

NZD/USD touched a session low at 0.8256 at 7:35 GMT, after which consolidation followed at 0.8258, falling 0.52% for the day. Support was likely to be received at October 2nd low, 0.8194, while resistance was to be met at October 25th high, 0.8338.

The MSCI Asia Pacific Index of shares decreased 0.5%, which also boosted kiwis retreat.

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.

Meanwhile, Federal Reserve Bank policymakers are expected to meet today. 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.

Yesterday it also became clear that industrial output in the United States rose 0.6% in September on a monthly basis, exceeding preliminary estimates of a 0.4% gain, after production climbed 0.4% in August. However, the index of pending home sales in the country declined 5.6% in September to reach a value of 101.6, or the lowest level since December 2012. In August compared to July sales decreased 1.6%.

Elsewhere, the kiwi was lower against the euro, with EUR/NZD cross advancing 0.27% on a daily basis to trade at 1.6662 at 8:34 GMT. It became clear that the index of business confidence in France came in at a reading of 85 in October in consonance with projections. In addition, AUD/NZD pair was falling 0.23% to trade at 1.1514 at 8:36 GMT. The Aussie was losing ground on a wide scale, after RBA Governor Glenn Stevens said that the national currency could be “materially lower” in the future.

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