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NZD/USD remains bid above 100-day MA as RBNZ's Orr downplays coronavirus fears

  • NZD/USD is holding onto gains above the 100-day average at 0.6459. 
  • RBNZ's Orr said the negative impact of the coronavirus outbreak could be short-lived. 
  • The bank kept rates unchanged at 1% earlier today. 

NZD/USD continues to trade at session highs above the 100-day moving average (MA) at 0.6459 with Reserve Bank of New Zealand's governor Orr downplaying coronavirus scare during the press conference. 

Orr called coronavirus outbreak a downside risk to New Zealand's economy but said the negative impact will be short-lived and the economy will rebound in the second half of 2020 on the back of fiscal and monetary policy stimulus. 

The central bank kept rates unchanged at 1%, as expected, at 01:00 GMT and surprised markets by rolling out forecasts that showed the borrowing costs will remain unchanged throughout 2020. 

The markets were expecting the central bank to hint at deeper rate cuts during the year ahead. 

As a result, the NZD/USD pair jumped from 0.6408 and 0.6462 in the 15 minutes to 01:15 GMT and is now trading at 0.6465. 

The pair could continue to gain altitude on not-so-dovish RBNZ and signs of risk reset in the equity markets. The US stocks rallied on Tuesday with the S&P and Nasdaq printing record closes. At press time, major Asian indices like Nikkei and Hang Seng are flashing moderate gains. 

Technical levels

 

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