NZD/USD oscillates in a range above the 0.6200 area ahead of FOMC

• NZD/USD oscillates in a range just above the 0.6200 area during the early Asian session on Tuesday. 
• Market anticipated that the Federal Reserve (Fed) will hike rates by 25 basis points (bps) to 5.25–5.50%.
• Market participants will also focus on US, China developments.

The NZD/USD pair consolidates in a narrow range above the 0.6200 area in the early Asian session. The market seems cautious ahead of the Federal Open Market Committee (FOMC) meeting.

The US S&P Global Composite PMI for July showed weaker-than-expected data. The figure fell to 52 from 53.2, versus 53.1 expected. Meanwhile, the S&P Global Manufacturing PMI improved to 49 from 46.3, and the Services PMI declined to 52.4 from 54.4. The data failed to lift the US Dollar against the Kiwi (NZD), which gained momentum during the day.

The Federal Reserve (Fed) will announce the outcome of its monetary policy meeting on Wednesday. According to the CME Group FedWatch tool, it is widely anticipated that the Fed will increase interest rates by 25 basis points (bps) to 5.25–5.50%.

On Monday, Statistics New Zealand reported that New Zealand’s Trade Balance in June decreased to $9M MoM from $52M previously (revised). The annual trade deficit decreased to $15.98B for the same month from $-17.12B previously (revised from $-15.64B). Additionally, Exports for June declined to $6.31B compared to $6.97B (revised) previously, while imports fell to $6.3B from $6.91B prior.

A lack of economic data released from New Zealand later this week has left market participants taking cues from US and China developments. China’s top leaders signaled additional support for the real estate sector and a series of measures to stimulate consumption.

Market participants will keep an eye on the FOMC meeting and Fed Chairman Jerome Powell’s press conference. Apart from this, traders will take cues from US CB Consumer Confidence, Advance GDP QoQ, and the Fed’s preferred measure of inflation, the core Personal Consumption Expenditure (PCE) Price Index MoM. These events could significantly impact the US Dollar’s dynamic and give the NZD/USD pair a clear direction.