NZD/USD struggles to pull away from multi-year lows, trades below 0.6350

• US Dollar Index inches higher above 98 mark.
• RBNZ's Orr says NZD exchange rate plays significant role in competitiveness.
• Coming up: ANZ Activity Outlook and Business Confidence reports.

The NZD/USD pair failed to recover above the 0.64 earlier this week and extended its slide to its lowest level since September 2015 at 0.6326. Although the pair recovered modestly from that level, it seems to be having a difficult time pushing higher. As of writing, the pair is down 0.2% on the day at 0.6345.

Kiwi stays under pressure

The lack of macroeconomic data releases from New Zealand on Wednesday allowed the market sentiment to continue to drive the pair's action. With the 30-year US Treasury bond yield falling below the 3-month bond yield for the first time in 12 years on Tuesday, concerns over a recession in the US forced investors to seek refuge and weighed on risk-sensitive antipodeans. On Thursday, the ANZ Activity Outlook and Business Confidence data from New Zealand will be looked upon for fresh impetus.

Meanwhile, in a speech titled "We are not alone with Monetary Policy," Reserve Bank of New Zealand Governor Orr said that the NZD exchange rate plays a significant additional role in competitiveness. "Our research gives us confidence that even at these low levels of interest rates, monetary policy remains as effective as ever at providing timely economic stimulus," Orr added.

On the other hand, the dollar preserves its strength on Wednesday with the US Dollar Index climbing above the 98 mark and keeps the bearish pressure on the pair intact. Ahead of speeches by Richmond Fed President Barkin and San Francisco Fed President Daly later in the session, the index is up 0.2% on the day at 98.21.

Technical levels to watch for