NZD Holds Near Lows Ahead of Fed Decision and RBNZ Leadership Change
The New Zealand Dollar (NZD) is hovering near its lows as markets await the Federal Reserve's monetary policy decision on Wednesday. The NZD/USD pair is trading around 0.5755, virtually unchanged from the day before after rebounding from a two-month low at 0.5737.
Investors are holding back from taking large positions ahead of the Fed announcement, and the US Dollar (USD) has also paused its recent gains. The pair is currently above its session low due to some profit-taking on the Greenback, but caution prevails in the lead-up to the central bank's decision.
Markets widely expect the Fed to raise its benchmark interest rate by 25 basis points, bringing the target range to 3.75%-4%. According to the CME FedWatch tool, the implied probability of this move stands at around 92%.
The Reserve Bank of New Zealand (RBNZ) is also in focus as Assistant Governor Karen Silk will leave in December. Silk has been a hawkish voice on the monetary policy committee and has highlighted upside risks to inflation. Her departure could alter the balance within the central bank, which investors expect to lead to further interest rate increases.