Investing.com - The New Zealand dollar, which had previously been firming against the greenback, continued lower against its U.S. rival during Wednesday’s Asian session as traders stepped back from riskier currencies ahead of the release of minutes from the Federal Reserve’s most recent monetary policy meeting. Those minutes are due out later Wednesday.
In Asian trading Wednesday, NZD/USD slid 0.51% to 0.7940. The pair was likely to find support at 0.7884, the low of August 7 and resistance at 0.8075, the session high.
On Tuesday, the kiwi was pressured after the Reserve Bank of New Zealand said the kiwi as overvalued, adding that while a rate rise might be needed next year, it wasn't needed now.
In addition, RBNZ Governor Graeme Wheeler announced home lending restrictions to help cool the market without having to raise interest rates.
Separately, a report showed that inflation expectations for New Zealand rose to 2.4% in the second quarter, from 2.1% in the three months to March.
Now traders will focus on the Fed minutes, which are expected to provide valuable clues exactly when the U.S. central bank could begin tapering its USD85 billion-per-month bond-buying program.
Stimulus tools such as the Fed's USD85 billion in monthly bond purchases tend to weaken the dollar by driving down interest rates, but yields on 10-year U.S. government bonds have been soaring in recent weeks, implying currency markets expect tapering to arrive sooner rather than later.
In U.S. economic news out Tuesday, the Federal Reserve Bank of Chicago’s national activity index for July hit -0.15 from a revised -0.23 in June, though the number came in much worse than market expectations for a -0.10.
Elsewhere, NZD/JPY slid 0.83% to 76.97 while AUD/NZD rose 0.35% to 1.1410.
In Asian trading Wednesday, NZD/USD slid 0.51% to 0.7940. The pair was likely to find support at 0.7884, the low of August 7 and resistance at 0.8075, the session high.
On Tuesday, the kiwi was pressured after the Reserve Bank of New Zealand said the kiwi as overvalued, adding that while a rate rise might be needed next year, it wasn't needed now.
In addition, RBNZ Governor Graeme Wheeler announced home lending restrictions to help cool the market without having to raise interest rates.
Separately, a report showed that inflation expectations for New Zealand rose to 2.4% in the second quarter, from 2.1% in the three months to March.
Now traders will focus on the Fed minutes, which are expected to provide valuable clues exactly when the U.S. central bank could begin tapering its USD85 billion-per-month bond-buying program.
Stimulus tools such as the Fed's USD85 billion in monthly bond purchases tend to weaken the dollar by driving down interest rates, but yields on 10-year U.S. government bonds have been soaring in recent weeks, implying currency markets expect tapering to arrive sooner rather than later.
In U.S. economic news out Tuesday, the Federal Reserve Bank of Chicago’s national activity index for July hit -0.15 from a revised -0.23 in June, though the number came in much worse than market expectations for a -0.10.
Elsewhere, NZD/JPY slid 0.83% to 76.97 while AUD/NZD rose 0.35% to 1.1410.