The NZD/USD currency pair hovered just above a fresh 17-week low of 0.6024 on Wednesday ahead of the outcome of the Federal Reserve’s policy meeting.
The Fed is widely expected to leave its federal funds rate target range without change at a 23-year high of 5.25%-5.50% for the fifth straight policy meeting in March.
Federal Reserve Chair Jerome Powell had said that a rate cut in March was “not the base case.”
As inflation at both the consumer and producer level has shown signs of stickiness, investors tempered their expectations of the pace and scale of Fed rate cuts this year. This has provided support to the US Dollar over the past several trading days.
73 basis points of Fed rate cuts are now priced in, compared with 150 bps priced at the start of 2024.
Markets are now pricing in a 59% chance of the Federal Reserve cutting interest rates in June, according to the CME FedWatch tool.
Meanwhile, in terms of macro data, NZD traders now focus on the fourth-quarter report on New Zealand’s GDP growth due out at 21:45 GMT.
Currency Pair Performance
As of 11:15 GMT on Wednesday the NZD/USD currency pair was edging down 0.35% to trade at 0.6031.
Earlier in the session, the Forex pair went down as low as 0.6024. The latter has been the pair’s weakest level since November 23rd 2023 (0.6013).
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