NZD/USD steady around 0.7020 investors focus on the Fed

• NZD/USD clings to 0.7020 waits for a catalyst to get direction.
• The market sentiment improves as good news emerges from China.
• Fed: Expected to hold rates and the QE unchanged.

The NZD/USD is steady during the New York session, trading at 0.7021, up 0.21% at the time of writing.

The market sentiment is positive on the back of good news from China, lifting the commodity-linked currencies like the kiwi. On Wednesday, the People's Bank of China (PBoC) left the 1-year and the 5-year LPRs unchanged at 3.85% and 4.65%, respectively. Additionally, according to a press release, Evergrande said it would pay the yuan-bond denominated coupon due on Thursday.

Investors focus shifts to FOMC

Meanwhile, the US Dollar Index, which measures the performance of six peers against the buck, is barely down 0.03%, sitting at 93.19, waiting for the FOMC outcome.

Later on the day, the Fed will release its monetary policy statement and the updated Summary of Economic Projections (SEP). In the monetary policy statement, we could expect that the interest rates will be unchanged. However, the spotlight of the meeting will be the QE’s reduction. If there is some sort of announcement on the statement, it could be positive on the US dollar, as most investors expect the Fed to reveal its bond taper intentions in the November meeting. 

KEY TECHNICAL LEVELS TO WATCH