NZD/USD is gaining strength following the Reserve Bank of New Zealand (RBNZ) governor Orr’s positive comments on the state of the economy.

“The economic activity domestically and internationally has been more resilient than earlier assumed,” Orr said during the post-rate decision press conference while taking note of the below-target inflation and employment.

Adding to the positivity, the Central bank kept the Official Cash Rate unchanged at 0.25%. The RBNZ boosted its large scale asset purchase program by NZD 100 billion and marked readiness to cut the rates to negative while announcing the launch of the Funding for Lending Program (FLP), which offers funds directly to the banks at a rate near the OCR in December. The additional easing, however, failed to entice sellers.

Following RBNZ moves, Governor Orr sounds optimistic for domestic and international economic recovery. The policymaker also hints at the size of the FLP, near $28 billion, which will begin from December.

Economic activity since the August Monetary Policy Statement, both international and domestic, has proved more resilient than earlier assumed. In New Zealand, this trend was evident across a range of indicators, including employment, household spending, GDP, and asset prices. These outcomes reflect the effectiveness of the health and economic policy responses to the initial shock.

On the other hand, As the second wave of coronavirus tightens its grip in the US, hospitalizations of infected patients have reached the highest ever during this pandemic, up by 61,471, as of late Tuesday. According to a tally, the world’s biggest economy reported a record number of infections for the seventh day in a row on Tuesday while the death count rose by 1,450. Amid the coronavirus escalation, Nevada Governor endorsed a ‘stay at home’ mentality for the next 14 days.

NZD/USD 4 Hour Chart:

Support: 0.6804 (S1), 0.6785 (S2), 0.6768 (S3).

Resistance: 0.6840 (R1), 0.6858 (R2), 0.6876 (R3).

In the prevailing market conditions, NZD seems to be stronger than USD. We expect a bullish trend for NZD/USD.