NZ Dollar Climbs On U.S. Stimulus Hopes

The NZ dollar appreciated against its major counterparts in the Asian session on Wednesday, as optimism about a U.S. stimulus package and progress in the Covid vaccine rollout lifted risk sentiment.

House Speaker Nancy Pelosi held discussions with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer and House Minority Leader Kevin McCarthy on Tuesday to break the impasse on the coronavirus relief package.

After the meeting, McConnell struck an upbeat tone, saying that significant progress has been made on talks over the aid package.

Congressional leaders are planning to reach a deal before the end of the year.

Investors await the outcome of a two-day Federal Reserve policy meeting ending later in the day. The Fed is expected to keep the key overnight interest rate near zero and the QE program at $120 billion a month.

Policy decisions from the Bank of England, the Swiss National Bank and the Bank of Japan are also due this week.

The kiwi edged up to 1.0628 against the aussie from Tuesday's closing value of 1.0660. The kiwi is seen finding resistance around the 1.03 level.

Data from Westpac showed that Australia's leading index registered its strongest growth in the survey history in Nove,ber signaling above trend growth.

The six-month annualized growth rate in the Westpac Melbourne Institute leading index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, rose to 4.38 percent in November from 3.77 percent in October.

The kiwi spiked up to a 2-day high of 1.7104 against the euro, compared to yesterday's closing quote of 1.7138. Next key resistance for the kiwi is seen around the 1.68 region.

The NZ currency reached as high as 0.7114 against the greenback, setting a 2-day high. The pair had closed yesterday's trading session at 0.7086. The kiwi is likely to face resistance around the 0.74 level.

The kiwi gained to 73.63 against the yen, compared to Tuesday's New York session close of 73.46. If the kiwi gains further, it may face resistance around the 76.00 level.

Data from the Ministry of Finance showed that Japan posted a merchandise trade surplus of 366.8 billion yen in November.

That was well shy of expectations for a surplus of 529.8 billion yen and down sharply from 872.9 billion yen in October.

Looking ahead, U.K. consumer and producer prices for November are scheduled for release at 2:00 am ET.

PMI reports from major European economies and Eurozone trade data for October are due in the European session.

Canada CPI and U.S. retail sales for November, as well as business inventories data for October and NAHB housing market index for December will be released in the New York session.

At 2:00 pm ET, the Fed announces its decision on interest rate. Economists widely expect the federal funds rate to be kept at 0 - 0.25 percent.