NZD/USD loses gains above the mid-0.6200s, eyes on US housing data

• NZD/USD loses ground around 0.6261 in the Asian session on Wednesday. 
• RBNZ Governor Adrian Orr said that they were surprised by GDP data last week, indicating the economy shrank.
• Investors anticipate the Fed to keep rates steady at its January meeting but could start cutting rates as soon as March. 
• US Existing Home Sales will be released later on Wednesday. 

The NZD/USD pair snaps its seven-day winning streak during the Asian session on Wednesday. However, the downside of the pair might be limited due to the ongoing US Dollar (USD) weakness and lower US Treasury bond yields. At press time, the pair is trading at 0.6261, losing 0.09% on the day. 

Early Wednesday, Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr said that they were surprised by GDP data last week indicating the economy shrank but has no opinion yet on what it means for the interest rate outlook. He added that the New Zealand GDP data was surprisingly subdued while mentioning that there’s still a long way to go as the inflation remains too high.

Furthermore, the People’s Bank of China decided to leave the one-year and five-year Loan Prime Rate (LPR) unchanged on Wednesday at 3.45% and 4.20%, respectively.

On the USD’s front, The Federal Reserve (Fed) Chairman Jerome Powell said that it’s premature to declare victory over inflation or discuss the timing of rate cuts. However, he noted that the Core inflation rose just a 2.5% annual rate in the past six months and not far above the central bank’s 2% inflation target. According to the CME FedWatch Tool, the market anticipates the Fed to keep its benchmark rate steady at its January meeting, but could start cutting rates as soon as March. 

Moving on, market participants will monitor the US Existing Home Sales, due later on Wednesday. In the absence of top-tier economic data released from New Zealand’s docket this week, the NZD/USD pair remains at the mercy of the USD price.