NZD/USD enters Asia on the front foot

• NZD/USD bulls stay in charge ahead of a busy week.
• The Fed is the showdown event among a number of key data.

In a slow start to the week, NZD/USD is up towards the end of the New York session, higher by 0.27% on the day after rising from a low of 0.6214 to a high of 0.6279. The US dollar was pressured vs. a basket of rival and major currencies on Monday as investors moved to the sidelines.

The Fed is widely expected to raise interest rates by 75 basis points at the conclusion of its policy meeting on Wednesday. However, the concerns are stemming from recent data that is showing that the world's largest economic power could be headed for a recession. On Friday, data showed that the US Composite PMI Output Index fell far more than expected to 47.5 this month from a final reading of 52.3 in June.

''The Kiwi gained overnight in uneven market conditions,'' analysts at ANZ Bank said. ''Data over the rest of the week may prove to be pivotal for medium-term levels for the NZD,'' the analysts advise. ''How hawkish the FOMC is, along with US data on wages and inflation, may set the tone for DXY. And domestically, ANZBO is likely to be very important for getting a read on how the Reserve Bank of New Zealand’s hikes are feeding into price pressures and activity.''

In the US, traders will be paying attention to the advance reading for second-quarter Gross Domestic Product, for one. If this were to show negative growth, the US will be showing a traditional definition of recession. We then have the Fed's preferred inflation measure which will be released in the form of Personal Consumption Expenditures, PCE.