SYDNEY, March 17 Reuters The Australian and New Zealand dollars were steady on Wednesday with currencies generally treading water ahead of a U.S. Federal Reserve meeting where policymakers are expected to reiterate their dovish policy stance despite rosier economic projections.
The Australian dollar was flat at 0.7746, drifting away from a recent oneweek high of 0.7801 around which lies critical chart resistant. Key support for the Aussie is seen around 0.7710.
The New Zealand dollar was mostly unchanged at 0.7193. It sees strong support at 0.7100 while facing resistance at 0.7200 and 0.7267.
Economists expect the Fed to forecast the U.S. economy will grow in 2021 at the fastest rate in decades, with unemployment falling and inflation rising, as the COVID19 vaccination campaign gathers pace and a 1.9 trillion relief package washes through to households.
Financial markets are pricing in three interest rate hikes through end2023 so all eyes would be on the Feds dot plots which signals the outlook for rates.
The Fed has kept interest rates pinned near zero for the past year, and has promised to keep them there until the economy reaches full employment, and inflation has hit 2 and is on track to exceed that pace for some time.
Another factor to watch is Chair Jerome Powells push back on longend bond yields, said Chris Weston, Melbournebased strategist at Pepperstone.
Could we be entering a realm where the Fed allows market forces more independence?