Forex - Kiwi gains on trade data as does yen, eyes ahead on the Fed

Investing.com - The New Zealand dollar gained in Asia on Wednesday after last year-end trade data came in better than expected, while February data in Japan showed the same trend.

NZD/USD traded at 0.7314, up 0.11%, while USD/JPY changed hands at 121.31, down 0.04%, after the data sets. AUD/USD traded at 0.7621, up 0.06%.

New Zealand's 2014 current account balance reached a deficit equivalent to 3.3% of GDP, better than the 3.4% expected while fourth quarter data showed a balance in deficit by NZ$3.2 billion, slightly wider than seen.

Australia said the February Westpac Leading Index fell 0.27 of a point to 98.21 while Japan said its February trade balance came in at a narrower than expected deficit of ¥425 billion, well below the ¥1.051 trillion seen, and exports rose a better than expected 2.4% year-on-year, compared to a 0.3% gain seen, while imports slid more that expected at 3.6%.

Later, Japan releases Machine Tool Orders for February at at 1500 local (0600 GMT).

Overnight, the dollar regained some ground against other major currencies on Tuesday, as sentiment on the greenback improved ahead of the Federal Reserve's highly-anticipated policy statement due on Wednesday.

The U.S. Commerce Department earlier reported that housing starts declined by 17.0% last month to hit 897,000 units from January’s total of 1.081 million units, worse than expectations for a decline of 2.4% to 1.049 million.

The report also showed that the number of building permits issued last month increased by 3.0% to 1.092 million units from January’s total of 1.060 million. Analysts expected building permits to fall by 0.5% to 1.065 million units in February.

Market participants were eyeing Wednesday’s Fed statement to see if it would drop its reference to being patient before raising rates and signal that it is ready to hike rates depending on economic data.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was quoted at 99.97, down 0.07% in early Asia.