Dollar steady ahead of Fed decision, kiwi slumps after RBNZ holds

The U.S. dollar held steady in currency markets as traders positioned ahead of the Federal Reserve's upcoming policy decision, while the New Zealand dollar, or kiwi, fell sharply after the Reserve Bank of New Zealand left its policy rate unchanged. The kiwi's decline reflects a widening rate differential, as the RBNZ's hold signals that interest rates in New Zealand will stay relatively low compared with peers, reducing the carry appeal of holding NZD and prompting outflows from the currency. The Fed's decision matters for the broader dollar complex through the same rate-differential channel, with the greenback sensitive to any shift in expectations for U.S. easing or tightening, and that sensitivity extends to EUR, GBP, JPY, and the commodity-linked AUD and CAD. NZD is the most directly exposed asset given its sharp reaction, while AUD, as the closest high-yielding Pacific peer, may see spillover pressure if the kiwi's weakness persists. The key catalyst for traders is the Fed's rate statement and the press conference that follows, particularly any guidance on the timing of future cuts, which

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