Ella 
During the Asian session on Wednesday, the NZD/USD exchange rate traded in negative territory for two consecutive days. A stronger U.S. dollar and risk aversion supported the pair’s gains. The pair is currently trading around 0.5932, down 0.20% on the day.
Economic data on Tuesday showed that the Conference Board’s (CB) consumer confidence index rose to 103.0 in September from 108.7 in August. The data reached its lowest level in four months, reflecting the impact of rising interest rates and political uncertainty. Building permits rose to 1.541 million in August from 1.44 million the previous month. The house price index rose to 0.8% in July from 0.4% the previous month, beating consensus expectations of 0.5%. New home sales fell to -8.7% in August from an 8% increase in July.
The Federal Reserve (Fed) decided to keep interest rates unchanged in a range of 5.25% to 5.50% at its September meeting last week. In terms of macroeconomic forecasts, most members still expect further interest rate hikes later this year. Minneapolis Federal Reserve President Neel Kashkari said on Tuesday that he is among Fed policymakers who believe there will be one more interest rate hike this year. He added that U.S. interest rates may have to be higher and stay higher for longer to cool the economy. The Fed’s hawkish stance boosted the USD/NZD exchange rate and acted as a headwind for NZD/USD.
On the New Zealand dollar front, markets appear to be pricing in an increase in the Reserve Bank of New Zealand’s (RBNZ) Official Cash Rate (OCR) to late 2023 as the New Zealand economy shows more resilience than initially expected. Regarding last week’s data, New Zealand’s trade balance (NZD) fell to $2.291 billion in August from $1.107 billion previously. The annual trade deficit for the month was $15.54 billion, compared with $15.88 billion in the previous month.
New Zealand’s business confidence index for September and the ANZ Roy Morgan Consumer Confidence Index will be released on Thursday and Friday respectively. In the United States, a report on U.S. durable goods orders will be released on Wednesday. Focus will shift to the Fed’s preferred measure of consumer inflation, the core personal consumption expenditures (PCE) price index, due out on Friday. Annual growth is expected to fall from 4.2% to 3.9%. Traders will look to the data for NZD/USD trading opportunities.
