The US Dollar firmed against both the New Zealand and Australian Dollars on Tuesday as markets positioned ahead of the Federal Reserve's policy decision and key regional inflation data. NZD/USD slipped 0.4%, closing near 0.5885 after reaching a session high close to 0.5925, with the pair forming lower highs and failing to hold above the 0.5900 handle. The trading range for NZD/USD was approximately 65 pips, between 0.5860 and 0.5925, and the pair ended the session with a bearish intraday tone, remaining below the daily open at 0.5915. Technical analysis indicates that NZD/USD is holding above both the 200-period and 50-period EMAs clustered around 0.5850–0.5860, suggesting a constructive near-term bias, though upside momentum appears vulnerable to a pause or shallow pullback after the latest advance. Market participants are closely watching for a speech from the Reserve Bank of New Zealand's Breman on Wednesday for policy outlook insights, as well as Thursday's ANZ-Roy Morgan consumer confidence release, following a prior soft reading of 91.3. Additionally, the ongoing Iran conflict continues to pressure commodity prices and freight costs, weighing on growth-sensitive currencies like the New Zealand Dollar. Friday's Australian PPI data is also being monitored for regional inflation signals. On the US side, the Federal Reserve's policy decision at 18:00 UTC on Wednesday is the central focus, with rates expected to be held at 3.50% to 3.75%. Markets are particularly attentive to Chair Powell's tone on inflation, given persistent oil price pressures from the Iran conflict and Strait of Hormuz disruptions. A hawkish hold is anticipated to keep NZD/USD below the 0.5900 handle into Thursday's US Q1 GDP and Core PCE prints, with Core PCE forecast at 3.2% YoY versus 3% prior. Meanwhile, AUD/USD posted a near-flat close around 0.7180 after trading within a 70-pip range between 0.7130 and 0.7200. The pair drifted back from session highs as traders awaited Wednesday's Australian CPI release, forecast to jump to 4.7% YoY for March from 3.7% prior, with markets attributing part of the expected acceleration to the Iran conflict's impact on energy and freight costs. The Trimmed Mean CPI is also in focus for its influence on RBA policy expectations. A print at or above consensus could tighten RBA hike expectations and support the Australian Dollar. Technicals show AUD/USD holding a mildly bearish intraday tone below the daily open at 0.7191, with the Stochastic RSI near 15 suggesting downside momentum has cooled. On the daily chart, AUD/USD maintains a bullish near-term bias, trading above the 50-day EMA at 0.7041 and the 200-day EMA at 0.6800, though the Stochastic RSI near 79 indicates the advance may be stretched. The Federal Reserve's decision and Chair Powell's commentary on inflation persistence, especially regarding energy-driven cost pressures, are expected to influence both NZD/USD and AUD/USD, with a hawkish Fed stance likely to cap upside for both pairs heading into further US and Australian economic releases.
CONCLUSION
Both NZD/USD and AUD/USD are under pressure as the US Dollar firms ahead of the Federal Reserve's policy decision and key inflation data from Australia and the US. Market participants are focused on central bank commentary and upcoming economic releases, with a hawkish Fed likely to limit upside for both currency pairs in the near term.