NZD/USD avoids deeper losses even though RBNZ's Orr says negative rates still possible

• NZD/USD barely moves in response to dovish comments by RBNZ's Orr.
• Kiwi could rise if equities maintain the recent uptrend. 
• Gains will likely be muted due to RBNZ's dovish stance and upbeat US data.

NZD/USD is showing resilience to dovish comments by Reserve Bank of New Zealand's (RBNZ) governor Orr. 

While the currency pair is reporting marginal losses on the day, so far, the downside has been restricted near 0.6434. 

RBNZ's Orr said during an interview with CNN that the central bank is pleased with the impact of quantitative easing and the size of asset purchases may be increased if required. More importantly, Orr said that negative rates are still on the table. 

The RBNZ recently doubled down on its commitment to keep interest rates at 0.25%. Some investment banks like Westpac are of the opinion that the rates be cut to sub-zero levels in November. 

While the RBNZ is open to cut rates below zero, its US counterpart, Federal Reserve, has time and again dashed hopes for negative rates. In fact, the Fed's interest rate dot plot released last week showed no policymaker projected negative rates at least through 2022. 

Looking forward, the pair may fall below 0.6434 if the heightened fears of the second wave of the coronavirus in China and the US weigh on the equity markets. At press time, the futures tied to the S&P 500 are reporting a 0.11% decline, while major Asian stock market indices are trading mixed. 

The Kiwi may find bids if the stocks extend the two-day winning run. However, RBNZ's dovish stance and the upbeat US retail sales data released on Monday are likely to keep gains under check. 

Technical levels