Perhaps lost in the shuffle given it's Fed day, the Reserve Bank of New Zealand will also announce its policy decision late in the New York session on Wednesday, Thursday New Zealand time, and is expected to hold the benchmark rate at 2.5 percent.
Governor Graeme Wheeler has already warned that RBNZ will have to raise rates next year, but added that lending limits to stem the hot housing sector may delay or reduce the hikes. The RBNZ has projected the rate increase cycle may go through to 2016 so the only question is when it will begin.
Wheeler has stated the kiwi is high but underpinned by robust economic recovery. Wheeler and the RBNZ are also prepared to intervene in currency markets if needed, though the New Zealand central bank’s resources for that are definitely finite. The upside to the strong kiwi is the positive impact on inflation and the possible reduction in the need for rate hikes which could push the start date further out.
The kiwi may move on something unexpected in the statement but it does not seem that Wheeler has left too much detail still to be announced. And besides, the focus is clearly on the Fed so it may be any moves in the U.S. dollar just drown out anything specific to the kiwi.