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Kiwi Regains Poise Post-Fed But Lags High-Beta Peers

NZD

NZD/USD took flight as the Fed's monetary policy decision/rhetoric sapped strength from the greenback. The rate lost some altitude ahead of the FOMC's announcement but finished the day ~30 pips better off.

  • U.S. policymakers took a unanimous decision to raise interest rates by the expected 75bp, but Chair Powell signalled a pivot to a more real-time, data-dependent approach going forward, with the pace of tightening expected to slow at some point.
  • Cross-asset signals were supportive to the kiwi, with equity markets drawing some additional support from Fed's comments & with the aggregate Bloomberg Commodity Index creeping higher.
  • Still, the NZD lagged its high-beta peers from the G10 basket, even as AUD/NZD showed some weakness in the immediate wake of the release of Australian CPI data. A strong recovery later in the day allowed the pair to print new five-year highs just shy of the NZ$1.1200 mark.
  • NZD/USD last trades at $0.6266, little changed on the day. A rally above the 50-DMA/Jun 24 & 27 highs located at $0.6310/27 would encourage bulls to take aim at Jun 16 high of $0.6396. Conversely, bears look for a sell-off past Jul 14 low of $0.6061, a key near-term support.
  • The domestic data docket is headlined by the ANZBO today, with ANZ-Roy Morgan Consumer Confidence coming up tomorrow.
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