The New Zealand dollar fell against its Australian counterpart as the local central bank is considered more prone to cut interest rates than Australia's.

The kiwi was trading at 94.51 Australian cents at 5pm in Wellington from 94.67 cents at 8am. It was also trading at 64.07 US cents from 64.18 cents, while the trade-weighted index was at 71.28 points from 71.41.

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Yesterday, the minutes were published from the Reserve Bank of Australia's monetary policy meeting earlier this month. It decided to hold its cash rate steady after cutting at the previous two meetings.

"The RBA is a reluctant cutter and the RBNZ has surprised the market and seems to have more of a downwards bias at the present time," says Tim Kelleher, head of foreign exchange sales at Commonwealth Bank of Australia.

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The market is also quite short the Australian dollar amid the ongoing US-China trade war.

"The market's still got a wary eye on Chinese retaliation to the US, which they've said they're going to do, but nothing's happened yet," Kelleher says.

RBA governor Philip Lowe is being reported as telling a private business event in Sydney this week that the trade war is the biggest single threat to the global economy.

"I do not have a clear idea of what strategy the US has," Lowe was reported to have said by Fairfax newspapers. Some in the US are saying it is "time for Team West to muscle up against China and that is very worrying," he said.

Meanwhile, JP Morgan Chase says the tariffs US President Donald Trump has already imposed on Chinese imports are costing the average American household US$600 ($936.14) a year and that will rise to US$1,000 if Trump carries through on his plan to slap tariffs on another US$300 billion of Chinese goods.

Last week, Trump delayed the starting date of the new tariffs from Sept. 1 to mid-December to "save Christmas," which suggested Trump knows he's wrong when he insists that China is paying the tariffs, not Americans.

Currency markets globally are also awaiting the annual conference of central bankers held at Jackson Hole in Wyoming

Federal Reserve chair Jerome Powell is scheduled to speak on Friday. The Fed is currently expected to next cut rates in September after doing so in July for the first time since the GFC.

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The kiwi was at 52.71 British pence from 52.72, at 57.75 euro cents from 57.79, at 68.19 yen from 68.14 and at 4.5186 Chinese yuan from 4.5302.

The New Zealand two-year swap rate edged down to a bid price of 0.9273 per cent from yesterday's close at 0.9374. The 10-year swap rate fell to 1.2275 per cent from 1.2400.