During the North American session, the New Zealand dollar fell to a new yearly low against the US dollar, trading at 0.5929 as Wall Street closed higher ahead of Wednesday’s much-anticipated Federal Reserve announcement. Investors must be vigilant because of things like the Federal Reserve’s aggressive tightening cycle, which could trigger a recession in the United States.

To close out the North American session, the NZD/USD is trading at 0.5955, down 0.57% from its opening price of 0.6002 at the start of the day.

There was an uptick in optimism at the end of the New York session. Market investors waited for Wednesday’s Fed decision, where Chair Powell and Co. are likely to raise rates by 75 basis points, despite the lack of US economic data. US Treasury bond rates, led by the 10-year benchmark note, surged to 3.494% despite US equities rising.

The US National Association of Home Builders (NAHB) home market index has declined for the ninth consecutive month, indicating a slowdown in the housing industry. The index is currently at 46, which is significantly lower than it’s post-pandemic high and indicative of the impact of rising interest rates.

In addition, the New Zealand Performance of Services Index (PSI) showed a significant increase of 58.6, beyond expectations and the prior month’s reading. The article claims substantial increases in business and sales after some initial hiccups.

Conclusion

Traders will have to rely on US information due to the lack of economic data on the agenda of New Zealand. Housing Starts and Building Permits in the United States will remain on the calendar in the coming months.