The New Zealand dollar that initially fell against its major counterparts recovered immediately in the Asian session on Wednesday, after the Reserve Bank of New Zealand left the main interest rate and asset purchase programme unchanged, saying that the current levels of monetary stimulus were required to support the economy.

The RBNZ maintained its Official Cash Rate at the record low of 0.25 percent, in line with expectations.

The MPC kept the Large Scale Asset Purchase (LSAP) Program of up to NZ$100 billion and the Funding for Lending Program (FLP) operation unchanged.

The Committee agreed that inflation and employment would likely remain below its remit targets over the medium term in the absence of prolonged monetary stimulus.

The Committee agreed to maintain its current stimulatory monetary settings until it is confident that consumer price inflation will be sustained at the 2 percent per annum target midpoint, and that employment is at or above its maximum sustainable level. Meeting these requirements will necessitate considerable time and patience.

The Committee agreed that it remains prepared to provide additional monetary stimulus if necessary and noted that the operational work to enable the OCR to be taken negative if required is now completed.

The kiwi strengthened to near a 2-year high of 1.6474 versus the euro, after reaching as low as 1.6613 at 8:00 pm ET. The kiwi is likely to find resistance around the 1.62 level.

Data from the Australian Bureau of Statistics showed that Australia wage prices climbed 1.4 percent on year in the fourth quarter of 2020 - exceeding expectations for an increase of 1.1 percent after the 1.4 percent gain in the previous three months.

Individually, private sector wages rose 1.4 percent and public sector wages gained 1.6 percent.

The kiwi moved higher to near a 3-year high of 0.7384 versus the greenback, following a low of 0.7314 set at 8:00 pm ET. If the kiwi rises further, it may challenge resistance around the 0.76 level.

The NZ currency was higher versus the yen, at more than a 2-year high of 77.83. This followed a low of 77.07 seen at 8:00 pm ET. On the upside, 82.00 is possibly seen as its next resistance level.

After having fallen to 1.0821 at 8:00 pm ET, the kiwi turned higher against the aussie, touching an 8-day high of 1.0732. Next key resistance for the kiwi is seen around the 1.06 level.

Looking ahead, Swiss economic sentiment index for February is set for release in the European session.

U.S. new home sales for January will be published in the New York session.

At 10:00 am ET, Federal Reserve Chair Jerome Powell is due to testify on the Semiannual Monetary Policy Report before the House Financial Services Committee, in Washington DC.