NZD/USD trades at fresh multi-month highs above 0.6200

• RBNZ says easier monetary policy cushioned near-term financial impact of coronavirus.
• US Dollar Index extends its slide below 99.00.
• US Federal Reserve’s Beige Book will be released at 1800 GMT. 

The NZD/USD pair gained nearly 100 pips on Tuesday boosted by the risk rally and the selling pressure surrounding the greenback. The pair stretched higher during the first half of the day on Wednesday and touched its best level since March 12 at 0.6233. As of writing, NZD/USD was up 0.52% on the day at 0.6228.

RBNZ supports kiwi

Earlier in the day, the Reserve Bank of New Zealand adopted an upbeat tone in its Financial Stability Report and helped the NZD preserve its strength. RBNZ noted that wage subsidies and easier monetary policy have cushioned the near-term financial impact of the coronavirus outbreak. “Economic stress test analysis suggests banks can continue to lend and prosper through a broad range of adverse scenarios,” the RBNZ added.

Meanwhile, the US Dollar Index, which lost 0.8% on Tuesday, remains on the back foot as global equity indexes continue to climb higher. At the moment, the index is at its lowest level since early May at 98.77, down 0.25% on a daily basis.

The only data featured in the US economic docket will be the Richmond Fed Manufacturing Index. Later in the day, the Federal Reserve will publish its Beige Book at 1800 GMT. 

During the Asian session on Thursday, the ANZ’s Business Confidence Index and the Activity Outlook Index from New Zealand will be looked upon for fresh impetus.

Technical levels to watch for