• NZD/USD surges to near 0.6230 as the Kiwi dollar performs strongly.
• Investors await the Fed’s interest rate decision, which is expected to be dovish.
• Traders lean towards Fed 50 bps rate cut prospects.

The NZD/USD pair delivers a sharp upside move to near 0.6230 in Wednesday’s North American session. The kiwi asset rallies as the New Zealand Dollar (NZD) strengthens despite the Reserve Bank of New Zealand (RBNZ) is expected to soften its Official Cash Rate (OCR) further due to weak economic performance and the US Dollar (USD) is down ahead of Federal Reserve’s (Fed) monetary policy decision.

For fresh insights on NZ’s economic health, investors will focus on the Q2 Gross Domestic Product (GDP) data, which will be published on Thursday. The NZ economy is estimated to have contracted by 0.5% on an annualized basis after growing by 0.3% in the second quarter of the last fiscal year.

Meanwhile, the major trigger for the Kiwi asset will be the Fed’s policy announcement at 18:00 GMT. The Fed is poised to deliver its first interest rate cut decision in more than four years. Investors will keenly focus on the Fed’s likely interest rate cut size and the dot plot.