The New Zealand dollar fell further after disappointment that the People's Bank of China hasn't done more to bolster confidence in the wake of the coronavirus crisis.

The kiwi was trading at 63.52 US cents at 5pm in Wellington from 63.95 at the same time yesterday while the trade-weighted index was at 71.04 points from 71.18.

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The PBOC has been depreciating its currency all week, lifting its daily setting for the yuan against the US dollar from 6.9795 on Monday to 7.0026 today – the central bank allows the yuan to fluctuate by 2 per cent around each day's midpoint.

It also followed up a cut on Monday in interest rates on medium-term lending by today cutting its one-year loan prime rate by 10 basis points and its five-year LPR by five basis points, cuts that had been expected by the market.


"The PBoC needs to exceed the market expectations, not hit them in this environment," said Stephen Innes, chief market strategist at AxiCorp.

Mike Shirley, a dealer at Kiwibank, said depreciating the yuan "is great for them, maybe, but it's still that psychological thing that anything over seven is bad."

Earlier today, the New Zealand currency fell as low as 63.50 US cents, its lowest level since November.

Sentiment wasn't helped by Australian Bureau of Statistics data showing that country's unemployment rate rising to 5.3 per cent in January from 5.1 per cent in December.

That was despite stronger than expected jobs growth, and a switch from part-time jobs into full-time ones, because the participation rate also rose.

The market focuses obsessively on Australian jobs data because of its importance to the Reserve Bank of Australia.

"Australian labour market data is always a bit of a mixed bag," Shirley said. "This was for January so coronavirus won't be fully reflected in that. It's the February data that will perhaps be more important from the RBA's perspective," Shirley said.

Coronavirus is still the market's dominant theme. "It's very sentiment driven, very scaredy-cat stuff. Every loud noise or bang and some people will react."


The New Zealand dollar was at 95.71 Australian cents from 95.43 at 5pm yesterday, at 49.21 British pence from 49.18, at 58.82 euro cents from 59.19, at 70.75 yen from 70.35 and at 4.4628 Chinese yuan from 4.4777.

The two-year swap rate rose to a bid price of 1.0400 per cent from 1.0902 yesterday while 10-year swaps fell to 1.3850 per cent from 1.4425.