NZD/USD advances to 12-day highs near 0.6650 ahead of FOMC Minutes

• NZD/USD is rising for the third straight day on Wednesday.
• US Dollar Index remains depressed following Tuesday’s sharp fall.
• FOMC’s Meeting Minutes is not expected to provide any fresh insights into policy outlook.

The NZD/USD pair gained 30 pips on Tuesday and continued to push higher on Wednesday. As of writing, the pair was trading at its highest level since August 7th at 0.6648, gaining 0.74% on a daily basis.

Focus shifts to FOMC Minutes

In the absence of significant macroeconomic data releases from New Zealand, the USD’s market valuation remained as the sole driver of NZD/USD’s movements. The US Dollar Index (DXY) lost 0.55% on Tuesday and closed at its lowest level in more than two years at 92.32 pressured by slumping US Treasury bond yields. 

Before the FOMC releases its July Meeting Minutes later in the day, the DXY posts small daily losses at 92.28 and the 10-year US T-bond yield is down 2.7%. 

The FOMC is not expected to provide any fresh insights into the monetary policy outlook. The committee looks to conclude its policy review by September and any potential changes to the forward guidance of the policy are likely to be announced then. Nevertheless, investors will pay close attention to the statement and a rebound in US T-bond yields could help the greenback gather strength against its rivals.

The annual Credit Card Spending data on Friday will be the last data to watch for from New Zealand.

Technical levels to consider