The NZ dollar is being pulled down by the market turmoil. Photo / File
The NZ dollar is being pulled down by the market turmoil. Photo / File
The New Zealand dollar hit a 10-year low overnight as the fallout from the coronavirus outbreak continued to unfold.
The currency bumped up a little after the US Federal Reserve announced that it would pump trillions of dollars into the financial markets to aid short term liquidity.
The Kiwi atone point hit a low of US60.90c - its lowest point since May 2009 - before rebounding a little to trade at US61.43 by 8.35 am.
Imre Speizer, senior markets strategist at Westapc, said the Fed's moves helped lift the New Zealand dollar off its lows, but he expected to see more falls.
"Panic is ratcheting higher every few days," he said.
"A new high of panic has been reached as of this morning," he said.
US financial markets initially saw the US Government's plans to deal with the outbreak as underwhelming, but heavy selling emerged in the US and world sharemarkets when President Donald Trump announced a US-Europe travel ban.
The US Fed is pouring money in financial markets. Photo / File
The US Fed is now moving to a fully-fledged quantitative easing model employed to try and offset the Global Financial Crisis.
"It's a ton of money," Speizer said.
"It keeps liquidity in the short term markets by injecting trillions - in half-trillion lots - which is huge," he said.
The moves were not enough to calm the equity markets. By 8.20 am the Dow Jones Index was down 8.6 per cent, at 21,512.
Earlier in the day, the European Central Bank deployed targeted new stimulus measures to cushion the shock to the economy from the virus outbreak.
The ECB's president said, though, that monetary policy couldn't do it alone and called for a "decisive and determined" response from governments.
