Can US data steer the New Zealand Dollar after both central banks hold rates?

• NZD/USD recovers after slipping below 0.5600 for the first time since 15 October.
• A hold by the Fed also leaves US interest rates 1.00-1.25 points higher than New Zealand's.
• Thursday brings US growth and price data, followed by New Zealand confidence figures.

NZD/USD slipped below 0.5600 for the first time since 15 October after the Reserve Bank of New Zealand (RBNZ) left its rate at 2.75% on Wednesday, despite markets pricing in a near 90% chance of a hike. The pair has since recovered from the low to trade just above 0.5600. Both central banks governing the currencies in NZD/USD kept interest rates unchanged on Wednesday.

A third consecutive hike had been forecast by all five of New Zealand's major banks, but the RBNZ voted 4-3 to hold, with Governor Breman among the four supporting unchanged rates. As a result, the rate was a quarter-point below the level traders had expected. Even though the committee had just voted against tightening, the RBNZ's statement indicated that tighter policy remained likely.

Later in the session, the Fed kept its rate at 3.75%-4.00%, maintaining a US rate advantage of 1.00-1.25 points over New Zealand. Declining to speculate about December, Fed Chair Warsh said he does not prejudge meetings. The pair inched up during his remarks, although most of its recovery from the RBNZ-driven low had taken place before the Fed announced its decision.

Which upcoming data could shape rate expectations?

Thursday's US release at 12:30 GMT is expected to show September personal spending rising 0.6%, following 0.9%, while income growth is forecast at 0.3%, up from 0.2%. Due next at 13:45 GMT on Friday, the Chicago Purchasing Managers Index (PMI) is projected at 56.1, compared with 58.8 previously. Both releases will inform the Fed's December decision and, in turn, the US side of the NZD/USD interest-rate gap.

The first New Zealand data release since the rate hold will be October's ANZ-Roy Morgan consumer confidence reading, due on Thursday at 21:00 GMT, following 97.6 previously. For a hike at the RBNZ's next meeting in December, one of the four members who backed the hold would need to change their vote.

What does the NZD/USD chart indicate?

More than four-fifths of the advance from the 14 October low just above 0.5550 to the 22 October high just above 0.5700 was erased by Wednesday's decline. The pair has returned to the sub-0.5650 range it occupied from 1 to 15 October. Its 50-day Exponential Moving Average (EMA) sits just above 0.5700, while the 200-day EMA is just below 0.5800.

NZD/USD: daily price chart