Investing.com - The New Zealand dollar pared gains against the U.S. dollar on Wednesday, as investors awaited the Federal Reserve’s policy statement later in the trading day, while Thursday’s rate review by the Reserve Bank of New Zealand was also in focus.
NZD/USD hit session highs of 0.8299 and was last up 0.19% to 0.8273.
The pair was likely to find support at 0.8218, Tuesday’s low and resistance at 0.8312, the high of January 24.
Demand for the greenback was underpinned by expectations that the Fed would cut its asset purchase program by another $10 billion, to $65 billion per month. The central bank announced the first cut to its stimulus program in December.
New Zealand’s dollar rose to session highs earlier as market sentiment strengthened after Turkey’s central bank announced aggressive rate hikes overnight, following an emergency policy meeting.
The move eased concerns over emerging markets, following a broad based selloff last Friday, triggered by worries over the impact of cuts in Fed stimulus and concerns over a possible slowdown in China.
The kiwi looked likely to remain supported ahead of Thursday’s RBNZ policy meeting, with markets split on whether the central bank will raise rates at this meeting or the next, as inflation remains above forecasts.
Elsewhere, the kiwi was higher against the yen, with NZD/JPY up 0.45% to 85.36 and was slightly higher against the Australian dollar, with AUD/NZD slipping 0.11% to 1.0618.