NZD/USD recovers from multi-year low as RBNZ’s Orr dimmed prospects of unconventional policy tools

• NZD/USD recovered a majority of the previous day’s losses on comments from RBNZ’s Orr.
• Kiwi buyers ignore earlier released New Zealand Retail Sales and dovish statements from RBNZ’s Assistant Governor.

With the RBNZ Governor defying further rate cuts, NZD/USD surged to an intra-day high of 0.6393, before taking rounds to 0.6384, during Friday’s Asian session.

The Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr was recently on wires while defending the central bank’s 50 basis points rate cut as he said that the rate cut  reduces probably of having to do more later. Mr. Orr also mentioned that unconventional policy is far from our central scenario.

Read: RBNZ Orr:  rate cut reduces probability of having to do more later, Kiwi rallies 0.30%

Earlier during the day, Christian Hawkesby, RBNZ’s Assistant Governor and General Manager of Economics, Financial Markets and Banking, spread worries about the stubbornly low inflation and low interest rates, as shown on the central bank’s website.

Additionally, New Zealand’s second-quarter (Q2) Retail Sales data have been downbeat with the headline figure marking 0.2% growth versus 0.7% prior while Retail sales ex-Autos grew 0.3% against 0.6% (revised) earlier.

Technical Analysis

Any upside is likely a pullback unless clearing past-June low of 0.6487, which in turn highlights the importance of January 2016 low of 0.6348 and September 2015 low surrounding 0.6235.