New Zealand Dollar holds steady below 0.5900 vs USD as traders seem hesitant ahead of FOMC
- NZD/USD lacks a firm intraday directional bias as traders seem hesitant ahead of the FOMC decision.
- US-Iran risks lift oil prices and revive inflation fears, boosting Fed hike bets and supporting the USD.
- The RBNZ’s hawkish tilt lends support to the NZD and the pair as USD bulls remain on the sidelines.
The NZD/USD pair struggles to build on the overnight bounce from the 0.5860 horizontal support and seesaws between tepid gains/minor losses during the Asian session on Wednesday. Spot prices remain below the 0.5900 mark, unchanged for the day, as traders keenly await the outcome of a two-day FOMC meeting.
Heading into the key central bank event risk, USD bulls seem hesitant and opt to wait for more cues about the path of US interest rates before placing fresh bets. Hence, the focus will remain glued to the accompanying policy statement and US Federal Reserve (Fed) Chair Kevin Warsh's comments during the post-meeting press conference. The Fed's outlook, in turn, will play a key role in influencing the US Dollar (USD) price dynamics and provide some meaningful impetus to the NZD/USD pair.
Meanwhile, the downside for the Greenback remains cushioned amid a fresh escalation of tensions between the US and Iran. In fact, Iran's Islamic Revolutionary Guard Corps (IRGC) launched a surprise attack and targeted US forces in the Middle East with multiple ballistic missiles late Tuesday. Meanwhile, President Donald Trump warned that the US will return to strong military action and target key Iranian infrastructure if diplomatic efforts do not bring a rapid resolution to the crisis.
Traders were quick to price in the geopolitical risk premium, which should act as a tailwind for the safe-haven USD. Adding to this, the US-Iran standoff over the Strait of Hormuz and a maritime blockade against Saudi Arabia by Yemen’s Iran-backed Houthis add to concerns over disruptions to global energy supplies. This, in turn, triggers a sharp recovery in oil prices and revives inflation fears, bolstering bets for at least one Fed rate hike in 2026 and validating the USD bullish tone.
However, the Reserve Bank of New Zealand's (RBNZ) hawkish tilt could support the New Zealand Dollar (NZD) and the NZD/USD pair. Strategists at Brown Brothers Harriman argue that “above-target inflation and a more favorable domestic growth outlook argue for additional RBNZ rate hikes, which is NZD supportive.” This warrants caution before positioning for an extension of the pair's recent pullback from the 0.5875 region, or the highest level since early June, touched last week.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.12% | -0.07% | -0.26% | -0.12% | 0.29% | -0.01% | -0.25% | |
| EUR | 0.12% | 0.06% | -0.15% | 0.00% | 0.43% | 0.10% | -0.12% | |
| GBP | 0.07% | -0.06% | -0.17% | -0.05% | 0.37% | 0.08% | -0.18% | |
| JPY | 0.26% | 0.15% | 0.17% | 0.14% | 0.57% | 0.22% | 0.01% | |
| CAD | 0.12% | 0.00% | 0.05% | -0.14% | 0.42% | 0.09% | -0.12% | |
| AUD | -0.29% | -0.43% | -0.37% | -0.57% | -0.42% | -0.32% | -0.53% | |
| NZD | 0.00% | -0.10% | -0.08% | -0.22% | -0.09% | 0.32% | -0.21% | |
| CHF | 0.25% | 0.12% | 0.18% | -0.01% | 0.12% | 0.53% | 0.21% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
