Investing.com - The New Zealand dollar edged higher against its U.S. counterpart on Wednesday, but gains were expected to remain limited as expectations for the Federal Reserve to continue tapering its stimulus program supported the greenback.
NZD/USD hit 0.8335 during late Asian trade, the session high; the pair subsequently consolidated at 0.8328, adding 0.16%.
The pair was likely to find support at 0.8248, the low of January 17 and resistance at 0.8390, the high of January 13.
Demand for the greenback remained supported by expectations for a reduction to the Federal Reserve’s quantitative easing program at its policy meeting next week to USD65 billion from the current USD75 billion.
The kiwi was lower against the Australian dollar, with AUD/NZD gaining 0.64% to 1.0657.
Also Wednesday, official data showed that consumer price inflation in Australia rose 0.8% in the fourth quarter, more than the expected 0.5% rise, after a 1.2% increase in the three months to September.
Australia's trimmed mean consumer price inflation, which excludes the most volatile 30% of items, increased by 0.9% in the last quarter, exceeding expectations for a 0.6% rise, after a 0.7% gain in the third quarter.
Separately, the Westpac Banking Corporation said its consumer sentiment index for Australia fell 1.7% this month, after a 4.8% decline in December.
Later in the day, New Zealand is to release private sector data on manufacturing activity.