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Forex - NZD/USD re-approaches 7-month trough ahead of Fed

Published 09/16/2014, 02:51 AM
Updated 09/16/2014, 02:51 AM

Investing.com - The New Zealand dollar slipped lower against its U.S. counterpart on Tuesday, re-approaching a seven-month trough as demand for the greenback remained broadly supported ahead of the Federal Reserve's upcoming policy statement.

NZD/USD hit 0.8154 during late Asian trade, the session low; the pair subsequently consolidated at 0.8155, falling 0.26%.

The pair was likely to find support at 0.8121, Monday's low and a seven-month low and resistance at 0.8232, the high of September 11.

Demand for the greenback remained supported by expectations for an early hike in U.S. interest rates.

The Fed was expected to cut its asset purchase program by another $10 billion at its upcoming policy meeting on Wednesday, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.

The kiwi was higher against the Australian dollar, with AUD/NZD edging down 0.13% to 1.1027.

Also Tuesday, in the minutes of its September policy meeting, the Reserve Bank of Australia reiterated its decision to keep interest rates on hold for an extended period of time and added that the exchange rate remains "above most estimates of its fundamental value."

The Australian dollar also came under pressure after RBA official Christopher Kent said that a decline in the nation's currency would support demand for local producers.

Mr. Kent was speaking at the Bloomberg Summit in Sydney.

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