Kiwi makes fresh multi-month highs after dovish FOMC

Daily Currency Update

The Australian and New Zealand dollar were the greatest beneficiaries of renewed risk appetite overnight, as US equity markets were buoyed by the FOMC’s dovish monetary policy statement. NZD/USD round tripped from 0.6530 to 0.6584 before retreating into this mornings’ open with the pair currently oscillating around the 0.6530 handle. With the AUD seemingly benefiting more than the NZD, the AUD/NZD cross rate rose from 1.0680 to 1.0730 overnight.
The major story overnight was the FOMC’s monetary policy statement. The US central bank left the policy rate unchanged at 0%-0.25%, delivered lower inflation and growth forecasts and made no mention of slowing down its policy stimulus even as equity markets rally. This saw US equities rally and nudged up global risk assets, including the Kiwi.
Thursday is set to be a pretty quiet day. On the data front, we have MI inflation expectations for June from across the pond and retail card spending on the domestic docket. Neither of which are expected to be market movers. Attentions will then turn to the May PPI and jobless claims out of the world’s largest economy. After breaking through trend-line resistance overnight of 0.6550, a continuation of the recent NZD/USD uptrend could pave the way for a move towards 0.6750. Given the speed of the kiwi’s ascension, downside supports are seen at 0.6470 before 0.6200.