Ella 
In early trading in Asia on Wednesday, the New Zealand dollar/US dollar fluctuated within a narrow range above the mid-range of 0.6100. Investors tend to wait and see before the NZD/USD interest rate decision is announced, with the Reserve Bank of New Zealand expected to keep interest rates unchanged. As of press time, the New Zealand dollar/US dollar was trading at 0.6170, with an intraday increase of 0.06%.
The Reserve Bank of New Zealand is expected to hold the official cash rate (OCR) steady at 5.50% for the fifth consecutive meeting. However, the possibility of raising interest rates cannot be ruled out. Investors will be paying close attention to New Zealand Reserve Bank Governor Adrian Orr’s press conference, where he may give some hints on monetary policy and the outlook for inflation. NZD/USD may attract some buyers if the Reserve Bank of New Zealand unexpectedly raises interest rates by 25 basis points (bps). On the other hand, if the New Zealand Reserve Bank releases dovish remarks, it may drag the New Zealand dollar lower and be negative for the New Zealand dollar/US dollar.
On the U.S. dollar, hawkish comments from Federal Reserve (FED) officials provided little support for the U.S. dollar (USD). Federal Reserve Governor Bowman said that while interest rates remain at the current level, inflation will continue to decline, but it is not the time to start cutting interest rates yet; Kansas City Fed President Schmid said that because the inflation level is higher than the target, the labor market is tight. , demand shows considerable momentum, so there is no need to adjust the stance of monetary policy.
Investors will pay close attention to the annual rate of U.S. fourth-quarter (Q4) gross domestic product released on Wednesday, as well as the preliminary value of the goods trade account, and speeches by Federal Reserve Chairman Bostic, Collins and Williams. Focus will turn to Thursday’s personal consumption expenditures (PCE) report, the Fed’s preferred inflation gauge. Stronger-than-expected inflation could boost the U.S. dollar and limit NZD/USD’s upside.
