The New Zealand dollar fell after the Reserve Bank's decision to cut its official cash rate to a record low after other central banks, notably the Federal Reserve and the Reserve Bank of Australia, decided to hold their key interest rates steady.
The kiwi was trading at 65.89 US cents at 5pm in Wellington, off the day's low at 65.25 in the seconds after the 2pm announcement of the rate cut, and from 66.01 cents at 8am. The trade-weighted index dropped to 71.90 points from 72.14.
The Reserve Bank's new Monetary Policy Committee said in its first OCR decision that "a lower OCR is necessary to support the outlook for employment and inflation consistent with its policy remit."
It cut the OCR from 1.75 per cent where it has sat since November 2016 to 1.5 per cent.
"The market was short going into it," says Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.