The New Zealand dollar fell against the greenback, dragged down by its trans-Tasman counterpart after Reserve Bank of Australia governor Philip Lowe talked about considering a rate cut in two weeks' time.

The kiwi was trading at 65.11 US cents at 5pm in Wellington from 65.32 at 8am and at 94.60 Australian cents from 94.50. The trade-weighted index fell to 71.90 points from 72.08.

Westpac senior market strategist Imre Speizer says a spate of Australian news knocked the New Zealand currency around, with an announcement by the Australian Prudential Regulation Authority this morning sending it as low as 94.45 Australian cents and Lowe's comments pushing it as high as 94.70 cents.

APRA announced it is thinking of letting authorised deposit-taking Institutions make their own assessments of whether borrowers can afford their repayment obligations. Currently, APRA's guidance is that banks should use a minimum interest rate of 7 per cent in making their affordability calculations.

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Lowe's comments came in a speech to the Economic Society of Australia in Brisbane.

"A lower cash rate would support employment growth and bring forward the time when inflation is consistent with the target," he said. The RBA target is 2.5 per cent.

"Given this assessment, at our meeting in two weeks' time, we will consider the case for lower interest rates."

Speizer says Westpac had been forecasting an Australian rate cut in August or November.

"It's not enough to say June is a slam dunk, but it's certainly been enough to increase the chances," he says.

The market's gone from pricing in a 70 per cent chance of an Australian rate cut in June to an 85 percent chance after Lowe's speech.

The New Zealand dollar was trading at 51.16 British pence from 51.31 and at 58.34 euro cents from 58.46. It was at 71.72 yen from 71.87, and at 4.4921 Chinese yuan from 4.5143.

The New Zealand two-year swap rate fell to 1.5397 per cent from 1.5484 yesterday, while the 10-year swap rate eased to 2.0550 per cent from 2.0675.

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