Tim Kelleher, the head of institutional foreign exchange sales at ASB Bank, says a large number of options, somewhere between $1-1.5 billion, had been holding the currency up against its Australian counterpart but their expiry has meant "the kiwi is trading a little more freely."
The move down in the cross rate reflects that the RBA plans to keep interest rates unchanged while the RBNZ now says the next likely move in its official cash rate is going to be down.
Some economists now think the RBNZ will cut the OCR twice this year with the first cut coming as early as May; others don't expect a rate cut until August.
"That means the differential between the two countries will narrow," Kelleher says.
The RBA's cash rate is currently 1.5 per cent while the RBNZ's OCR is at 1.75 per cent - the record low where it has sat since November 2016.
"Currencies at the end of the day are driven by interest rate differentials. The money will go where it's going to get a better return," Kelleher says.
Otherwise, the local currency was little changed as the market awaited key employment data due out in the United States later today.
Economists are predicting between 180,000-190,000 jobs were added to the US economy in March, after the February data showed just 20,000 jobs, well shy of expectations.
The New Zealand dollar was trading at 67.54 US cents from 67.58 while the trade-weighted index was at 73.28 points from 73.33.
The other well-worn themes still impacting the market are Britain's tortuous Brexit negotiations with that country's parliament seemingly able to agree on very little while the US-China trade talks are continuing in Washington this week.
Earlier today, President Donald Trump said the two nations are aiming to reach a deal in the next four weeks but he didn't announce a much-anticipated summit with Chinese President Xi Jinping.
The kiwi was trading at 51.58 British pence from 51.75, at 60.17 euro cents from 60.22, at 75.45 Japanese yen from 75.43 and at 4.5365 Chinese yuan from 4.5405.
The New Zealand two-year swap rate rose to 1.6339 per cent from 1.6223 yesterday while the 10-year swap rate rose to 2.2625 per cent from 2.2525.
