The New Zealand dollar strengthened against other major currencies in the early European session on Tuesday, as traders await the two-day policy meeting of the Federal Reserve gets underway later today, with investors hoping for dovish guidance.

While the U.S. Fed is widely expected to leave interest rates unchanged, traders will be looking to the accompanying statement for additional clues about a possible rate cut in September.

The Bank of Japan may raise interest rates on Wednesday while unexpected strength in U.K. services inflation has left the Bank of England's meeting on Thursday on a knife edge.

Trading later in the day may be impacted by reaction to U.S. reports on home prices, consumer confidence and job openings.

In the European session now, the NZ dollar rose to a 6-day high of 91.53 against the yen, a 5-day high of 1.8338 against the euro and a 4-day high of 1.1115 against the Australian dollar, from early lows of 90.25, 1.8435 and 1.1149, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 96.00 against the yen, 1.78 against the euro and 1.09 against the aussie.

Against the U.S. dollar, the kiwi edged up to 0.5901 from an early low of 0.5868. The kiwi may test resistance around the 0.61 region.

Meanwhile, the safe-haven yen weakened against its major counterparts in the European trading today.

In economic news, the unemployment rate in Japan came in at a seasonally adjusted 2.6 percent in June, the Ministry of Internal Affairs and Communications said on Tuesday. That was beneath expectations for 2.6 percent, which would have been unchanged from the May reading.

The jobs-to-applicant ratio was 1.23, shy of forecasts for 1.24 - which also would have been unchanged. The participation rate was 63.7 percent - exceeding expectations for 63.4 percent and up from 63.3 percent in the previous month.

The yen fell to a 4-day low of 167.95 against the euro, from an early 5-day high of 166.19. On the downside, 174.00 is seen as the next support level for the yen.

Against the pound and the U.S. dollar, the yen slipped to 6-day lows of 199.48 and 155.22 from early highs of 197.50 and 153.62, respectively. If the yen extends its downtrend, it is likely to find support around 206.00 against the pound and 158.00 against the greenback.

The yen slid to a 4-day low of 174.87 against the Swiss franc, from an early high of 173.32. The yen may test support near the 179.00 region.

Against the Australia and the Canadian dollars, the yen dropped to 6-day lows of 101.78 and 112.11 from early highs of 100.58 and 110.86, respectively. The yen is likely to find support near 108.00 against the aussie and 116.00 against the loonie.

Looking ahead, Eurozone flash GDP data for the second quarter and consumer sentiment for July are due to be released in the European session.

In the New York session, Germany's GDP data for July, U.S. Redbook report, U.S. house price index for May, U.S. Consumer Board's consumer confidence for July and U.S. Dallas Fed services index for July are slated for release.

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