The NZD/USD currency pair rebounded on Monday, after a recent streak of losses, ahead of the outcome of the Federal Reserve’s policy meeting.
The Fed is largely expected to leave its federal funds rate target range intact at 3.50%-3.75% at its March 17th-18th meeting, following three successive rate cuts last year.
In January, FOMC policy makers highlighted that economic activity had been expanding at a solid pace, job growth had remained slow, while inflation had remained somewhat elevated.
The minutes from the Federal Reserve’s January meeting showed that FOMC officials were divided over the future trajectory of interest rates. Several policy makers signaled that further rate cuts would likely be appropriate in case inflation continued to subside in line with their projections.
Others said that it might be prudent to keep the policy rate on hold for some time. Some FOMC members even argued that rate hikes could become necessary in case inflation remained elevated.
Investors will also be paying close attention to the press conference with Fed Chair Jerome Powell for clues over the timing of future interest rate cuts as well as to the new set of FOMC economic forecasts.
Meanwhile, kiwi traders will be paying close attention to New Zealand’s GDP growth data for the fourth quarter due out on Thursday.
The NZD/USD currency pair was last up 1.46% on the day to trade at 0.5853.
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